Oral Answers to Questions

INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Western Sahara

Jeremy Corbyn: How much aid to refugees from Western Sahara living in camps in Algeria his Department plans to provide in 2008-09.

Gareth Thomas: The Department supports Western Sahara through its share of the budget of the European Community Humanitarian Aid Office—ECHO—and contributions to the UN refugee agency, the United Nations High Commissioner for Refugees. ECHO plans to provide some €10 million in 2008 to support Western Saharan refugees, while in 2007 UNHCR spent some $2.3 million on supporting them.

Jeremy Corbyn: I thank my hon. Friend for that reply and the Government for the considerable amount of aid that they have given over many years to support the refugees from Western Sahara, who live in camps in Algeria, but can he help me? What pressure has been put on the United Nations to ensure that the people of Western Sahara have a free choice and a vote in a referendum to decide on the future of their territory, which we believe to be occupied by Morocco illegally at present, and thus allow people, who have spent 35 years in refugee camps, the right to return home and resume a normal life?

Gareth Thomas: My hon. Friend knows from his extensive interest in the issue that there has been a series of UN Security Council resolutions, which we have supported, calling for a solution that provides for the self-determination of the people of Western Sahara. I suspect that he also knows that talks were held in New York in June and August last year and in January and March this year. This year, we have similarly supported the UN Secretary-General's call to encourage the parties to enter into a more intensive and substantive set of negotiations. We want them to start as soon as possible.

David Drew: I hear what my hon. Friend says, but does he also recognise that Morocco is seeking special status from the EU? One of the pressures that we as a community in the EU could bring to bear is to make it clear to Morocco that we want the UN resolution on Western Sahara fulfilled. Will he talk to the Foreign Secretary about that?

Gareth Thomas: I know that my hon. Friend has also taken a close interest in the issue and I am obviously happy to draw his remarks to the attention of my right hon. Friend the Foreign Secretary. He knows that discussions are already taking place between the EC and Morocco, for example, to ensure that human rights issues are properly monitored in Western Sahara. He also knows that there is a UN Group of Friends of Western Sahara, of which we and several other European Union member states are part. That is one way in which we can support the UN Secretary-General's call for further intensive negotiations to try to resolve the matter and genuinely support the right of the people there to self-determination.

Afghanistan

Peter Bone: What recent assessment he has made of the humanitarian situation in Afghanistan; and if he will make a statement.

Douglas Alexander: Joint analysis by the Government of Afghanistan and the World Food Programme indicates that 4.5 million people face greater food insecurity. The UK Government have already committed £6 million in response to the World Food Programme appeal in Afghanistan. In addition, the Government of Afghanistan have taken a series of short, medium and long-term measures to address the issue. In support of that, the UK Government will provide a further £3.5 million for seeds and fertilisers to increase food production.

Peter Bone: Our servicemen and women in Afghanistan do an extraordinary job, not only in fighting terrorism but in providing humanitarian aid to civilians. I am sure that the Secretary of State will join me in praising them for their work. However, will he give his frank assessment of whether our European counterparts are pulling their weight?

Douglas Alexander: I will, of course, join the hon. Gentleman in paying tribute to the brave servicemen and women of our country, who are currently serving in Afghanistan. I had the great privilege of meeting them only the week before last, and I am sure that I speak for the House when I say that they are simply the best of British. Of course, they continue to work alongside the community in Helmand, but I also took the opportunity on my visit to meet Kai Eide, the UN special representative, and urge him to ensure that not simply other European countries but other international partners—we are one of a 38-strong international coalition in Afghanistan—work together more effectively in co-ordinating the international development effort. We have not only to prevail militarily in Helmand on the basis of the bravery of our servicemen and women, but to ensure that the Government of Afghanistan have an effective development strategy.

Paul Flynn: What effect on the humanitarian situation in Afghanistan has the recent terrible accident, in which an American aircraft, in three separate strikes, killed 47 Afghan civilians, mostly women and children, at a wedding party, had? Cannot we make representations to our NATO allies to say that, in these days when wonderful surveillance is available, such terrible accidents should never take place?

Douglas Alexander: Of course the loss of any civilian life is to be regretted. That said, I heard from the servicemen and women of the United Kingdom whom I met the extent to which we rely on effective co-operation with our allies in the United States. Let me place on record my gratitude for the continuing efforts of all 38 countries, who are clear that they stand together in solidarity and in support of the democratically elected Government of Afghanistan. The people who have the greatest number of questions to answer are those insurgents who seek to frustrate the democratic will of the people of Afghanistan and who still seek to burn schools, behead teachers and drive women back into a previous era, when they were not allowed to enjoy the opportunities that are available to them in Afghanistan today.

Gregory Campbell: What progress is being made in Helmand province, where our brave servicemen and women are doing so much to try to restore stability, on restoring something like normality for the indigenous population there? What investment and resources are going into Helmand?

Douglas Alexander: I can assure the hon. Gentleman that significant resources are going into Helmand. It was to examine that that I took the opportunity to visit Helmand, not simply seeing Camp Bastion, the main United Kingdom base, but moving out to forward operating base Delhi and seeing for myself the work being done there. When one goes to communities such as Garmsir and sees smallholders who are now able to open shops, or visits a clinic where midwives are being trained or a school that there are plans to develop in the months ahead, one sees the practical difference that is being made. However, that is contingent on the security environment. That is why the service and the sacrifice of our men and women are so important.

Mark Lancaster: During a recent visit to Afghanistan, my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) and I met the head of the counter-narcotics police in Helmand, who told us that, as a result of a UK Government decision to stop directly funding his unit and instead rely on the dysfunctional Ministry of Justice there, no funding had been received since March. Does the Secretary of State agree that although building capacity is important in Afghanistan, it is equally important that we have greater flexibility in delivering aid and support to provincial ministries, rather than to national ministries?

Douglas Alexander: The hon. Gentleman raises an important question. When we look at the progress that Governor Mangal has made in Helmand just in the past few months, it is reasonable that we should look at what support can be offered to the governor's office and to those provincial authorities working in Helmand. That said, although the challenge of counter-narcotics is complex, at its heart is a simple equation. Where one has the rule of law and security, it is easier to enforce an opium-free environment than where that security is lacking. That is why, regrettably, there was a rise in opium production in Helmand previously, given the insurgency and the security situation. However, on the basis of the visit that I paid the week before last, I can say that there is a quiet optimism that we will see progress not simply on the number of poppy-free provinces but, potentially, in Helmand. We will have to wait for the official figures, and there is a long way to go—it took neighbouring countries years to rid themselves of opium production—but I assure the hon. Gentleman that work is under way to ensure that we make progress there, too.

Michael Moore: May I associate myself and my hon. Friends with the tribute paid to our armed forces in Afghanistan and to the many brave officials in the right hon. Gentleman's Department, in other Government bodies and in British non-governmental organisations who put themselves at great risk for long periods? Recent reports from the World Bank and the agency co-ordinating body for Afghan relief have been highly critical both of the failure to deliver on previous pledges of assistance and of the nature of the assistance provided. Following the recent donor conference, what new mechanisms are now in place to ensure that the money gets there and, when it gets there, that it is used effectively?

Douglas Alexander: The foundation on which the discussion took place in Paris was the Afghan national development strategy, which provides a framework within which aid can be disbursed. That is why the conversations that I held with Kai Eide were so important. They were an opportunity to impress on him the urgency and importance that the Government attach to more effective international co-ordination. I have of course seen the reports to which the hon. Gentleman refers. It is therefore worth reminding the House that 80 per cent. of our development support to Afghanistan is provided through the Government of Afghanistan. One of the principal criticisms was that a significant proportion of aid from other countries was being spent outside the country and outside Government of Afghanistan mechanisms. Approximately 90 per cent. of UK Government aid is being spent in-country, so we start from a strong place in both conversations with our other international partners—for example, the conversations that I have been having with Henrietta Fore, the head of the United States Agency for International Development—and conversations with Kai Eide, whose job, on behalf of the Secretary-General, is to try to achieve better co-ordination.

G8 Summit

Malcolm Bruce: What the outcome for development policy of the G8 summit was.

Douglas Alexander: Last week's summit, as the Prime Minister made clear in his statement to the House, reiterated G8 commitments to delivering $50 billion in extra aid by 2010, with $25 billion going to Africa, and $4 billion in aid for trade and universal access to HIV/AIDS treatment by 2010. The G8 has also pledged more than $10 billion for food security, $60 billion over five years for health, 1.5 million more health workers, 100 million bed nets by 2010, and $1 billion for the education fast track initiative.

Malcolm Bruce: I thank the Secretary of State for that reply but, given the recent statement by the president of the World Bank that soaring food prices have put more than 100 million people back into extreme poverty, and the world into a danger zone, does the right hon. Gentleman agree that, if we are to deliver in Africa, tackling the drag-anchor problem of Zimbabwe is absolutely imperative? Given the failure of the UN Security Council resolution, will he make it clear that we now expect the southern African countries to unite in solving that problem, so that the aid and development that we are rightly contributing will be effective?

Douglas Alexander: As I am sure the right hon. Gentleman is aware, our Foreign Secretary was in southern Africa only last week, and he took the opportunity to have discussions with the Government of South Africa. Of course it is to be regretted that there were those who chose not to support the Security Council resolution, although we were encouraged by the terms of the G8 communiqué, which did make some progress. The opportunity now is twofold. First, we want to see further action through the Mbeki process that is being taken forward on behalf of the Southern African Development Community. Secondly, there will be a further opportunity in the days to come at the General Affairs and External Relations Council of the European Union, where we will press for further European sanctions. I can assure the House that we will continue to be unstinting in our efforts to support the initiatives being taken within Africa—not only in SADC but in the African Union as well—and that we will not miss any further opportunities, not least at the upcoming General Affairs and External Relations Council, to press the case and to say that we want to see real progress so that the voice of the Zimbabwean people can be reflected in their Government.

Tom Clarke: At the summit, were the Government in a position to reaffirm their commitment, made at Gleneagles, to achieving the United Nations target of 0.7 per cent. of gross national income? If so, that would take us ahead of most European Union countries.

Douglas Alexander: I am able to give my right hon. Friend the assurance that he seeks. We are continuing to pursue our goal of 0.7 per cent., and the spending review settlement that we secured only last July reflects the determination across the whole of the British Government to pursue that goal. Some countries, however, are not as determined as we are to achieve that goal in the time scale that we have set out, which is why we continue to use international forums to push other countries to accept their responsibilities as well.

Richard Ottaway: The Secretary of State will be well aware that much of the development debate at the G8 focused on poverty. Is he also aware that no country has got itself out of poverty without first stabilising its level of population growth? In those circumstances, to what extent is that factor being put into his own policies?

Douglas Alexander: Of course there is a challenge—as we are witnessing in the present food crisis—to ensure that all the mouths that are here now and in the future receive adequate food and adequate support. Equally, however, even countries with rising populations can grow enough to feed their own populations if they put in place the fundamentals, including good governance, effective macro-economic stability, improved agricultural productivity and effective trade. That is why we take a broad-minded approach in saying that we need to tackle poverty in a range of different ways. Of course, discussions on population and family planning are one aspect of that, but we recognise that there are many dimensions to this challenge.

Andy Reed: As my right hon. Friend is aware, water and sanitation made it back into the G8 communiqué after a five-year absence. Is he also aware that a cross-party group of MPs has just returned from a slum survivor event, at which we tried to highlight the fact that one in six people in the world live in slums? Water and sanitation will make an enormous difference to those people. Does my right hon. Friend acknowledge that what was said in the communiqué about a report being produced in a year is not enough? What we need is action now. Will he urge his international colleagues to put water and sanitation right at the heart of meeting our millennium development goals?

Douglas Alexander: Yes, and let me also pay tribute to the efforts that my hon. Friend has made on this issue for some time. Of course we welcome the fact that the G8 communiqué once again referenced water and sanitation, and recognised their centrality and importance not only for slum dwellers but for poor people right around the world. We are looking ahead to the high-level UN meeting on 25 September as the next opportunity to focus global attention on water and sanitation. We will have had the first annual global monitoring report by that time, as it is due to be launched in early September. I sincerely hope that the meeting will offer many others, and not just the United Kingdom Government, an opportunity to take forward the efforts to tackle this issue.

Andrew Mitchell: Although the G8 did, as the Secretary of State said, make some progress on development, may I return to the point made somewhat opaquely by his right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) and ask whether the Secretary of State is dismayed that Canada, France and Japan actually cut their aid to Africa last year? Is it not rather difficult to promote good governance in the developing world when developing countries see some leaders of the G8 countries going back on promises made in front of the world's television cameras three years ago at Gleneagles?

Douglas Alexander: I accept that more progress needs to be made in achieving the Gleneagles commitment, but it is with genuine pride that I reflect on the fact that at Gleneagles in 2005 it was a Labour Government from the United Kingdom who said that development in Africa should be the top priority. Real progress is being made with 41 million more children in school, 3 million more children surviving every year and more than 2 million people receiving AIDS treatment as a consequence of the action taken by G8 countries. I fully recognise that more work needs to be done, which is why I applaud the global leadership taken by our Prime Minister in urging all G8 countries to recognise their responsibilities and to put poverty so high up on the agenda in Japan.

Zimbabwe

James Duddridge: What recent assessment he has made of the humanitarian situation in Zimbabwe; and if he will make a statement.

Nicholas Winterton: What recent assessment he has made of the humanitarian situation in Zimbabwe; and if he will make a statement [Official Report, 21 July 2008, Vol. 479, c. 4MC.].

Gillian Merron: Mugabe's destructive policies continue to devastate the lives of millions of people in Zimbabwe. Half the population will need food aid by the end of the year. An estimated 36,000 people have been displaced internally, more than 100 killed and thousands injured. The decision by the Government of Zimbabwe to ban the work of many humanitarian agencies has added to people's suffering.

James Duddridge: I have had a number of harrowing discussions with Zimbabweans about the situation, so I have heard descriptions of innumerable atrocities, which are perhaps being underestimated, involving people having their limbs lopped off and being thrown alive into a fire. It is reminiscent of the discussions I had with people who survived the atrocities in Rwanda. Following the so-called election, we hope that the violence will decrease, but it is possible, with Mugabe's back against the wall, that it will increase. What contingency plans does the Department have if the violence and humanitarian situation worsen?

Gillian Merron: It is indeed a very grave situation. What we all want to see is a reforming Government based on the results of the March election, in which the people said what they wanted. Within that, we look to the stabilising of the economy, the upholding of the rule of law and the restoration of human rights. It is worth saying that, despite the ban on non-governmental organisations, we have still managed to help more than 9,000 victims of violence and displacement, many of whom were teachers and election observers. Despite that compromise, we have continued our work. On the issue of contingency, we are making every effort to get the ban on NGO activity lifted, while at the same time pursuing contingency plans to support the people of Zimbabwe in ways that we all want.

Nicholas Winterton: Robert Mugabe leads a criminal and illegitimate regime and should be treated as such. With millions starving and one in five children dying before their fifth birthday, is it not time that the Southern African Development Community and the African Union did more? Is it not very saddening indeed that Russia—a country that seeks to be part of the modern world—supported by China vetoed a UN Security Council resolution? What are we going to do about it?

Gillian Merron: I certainly agree that the Security Council decision was more than disappointing. The majority wanted action and I believe that those who voted against it have a responsibility to ensure that mediation does not falter. That means being unstinting in our efforts, as my right hon. Friend the Secretary of State said earlier. On SADC, we know that AU leaders have been quite clear in their mandate to deliver a negotiated settlement and it is our belief that we need a UN envoy on human rights to support it. In the end, an African solution is needed to this problem, which is the absolute responsibility of Mugabe and his Government.

Jim Devine: Can my hon. Friend reassure me and my constituent, Brian Chiwara, who is from Zimbabwe, that the aid that we are giving to that country is getting through to the people and not going into the back pocket of a dictator?

Gillian Merron: I can assure my hon. Friend's constituent of that. Indeed, this morning, I spoke to our team in Zimbabwe, who are making sterling efforts despite the ban on non-governmental organisations. We are still managing to have essential medicines and supplies delivered to clinics and hospitals. We are ensuring that family planning commodities and condoms are available across the country. We are supporting HIV prevention programmes, which are continuing, and our support to UNICEF's orphans and vulnerable children programme is still helping to pay school fees for thousands of children. Indeed, 1.4 million children are being vaccinated against preventable diseases. I assure my hon. Friend's constituent and the House that no funding whatever goes through the Government of Zimbabwe.

David Tredinnick: Is it not the case that the Chinese would not support the UN resolution because they are busily buying up land and assets in Zimbabwe at knock-down prices? What discussions has the Minister had about that?

Gillian Merron: As I said earlier, we are disappointed that China, along with Russia, vetoed the UN Security Council resolution. Our work is to continue to persuade China to use its influence positively and to ensure that its economic trade engagement is in support of democracy, human rights and the rule of law.

Anne Snelgrove: A number of my constituents have contacted me with their concerns about the effect of sanctions on Zimbabwe on the ordinary people of that country. Does my hon. Friend agree that we should not impose sanctions on Zimbabwe, but should continue to condemn Robert Mugabe?

Gillian Merron: I certainly can agree with my hon. Friend, because the test of any sanction is that it must target Mugabe and his elite, and not harm the ordinary people of Zimbabwe, whom we are here to support. We have EU measures in place, targeting the regime through a visa ban, an asset freeze on Mugabe and 130 named individuals, and an EU embargo on arms.
	With the EU, we are putting together a package of measures for the General Affairs and External Relations Council, which meets next week, to extend that to include more individuals, add companies linked to key members and tighten the exemptions to the visa ban. I can assure my hon. Friend and the House that all those are targeted on Mugabe and his regime, not on the people of Zimbabwe.

Andrew Mitchell: Will the Government consider the possibility of publishing details of the specific support that Britain will provide for Zimbabwe once the criminal and illegitimate Mugabe regime is over? Would not that set a good example to other prospective donor nations and encourage the surrounding countries to look to the future while offering some hope to the long-suffering people of Zimbabwe for an end to their nightmare?

Gillian Merron: Our job is to get help to the poorest people in Zimbabwe to see them through this extremely difficult time. As part of that, we are using sanctions to bring people to the table, but in terms of recovery, as I said earlier, we need to work with a reforming Government. That will include full humanitarian access, the rule of law, human rights and democracy. The principles for re-engagement will be agreed by donors, and we estimate that, when it comes to it, there will be about £1 billion a year for five years. The UK stands ready to play its role, but will work with its international partners to do so.

Gambia

Linda Gilroy: What developmental projects and programmes his Department supports in the Gambia; and if he will make a statement.

Gillian Merron: The Department for International Development allocated £3 million this year towards programmes to improve basic education, financial governance, access to justice and support to civil society in the Gambia. We work closely with the Gambian Government and we also provide additional funding to donors such as the European Union, the World Bank and the United Nations agencies.

Linda Gilroy: I thank my hon. Friend for that response, which refers to a welcome investment in the rule of law and democracy in a relatively stable country, but does she understand the concerns of the Northfield family in Plymouth for their relative, Charlie Northfield, who has been detained without his passport since February in a country where the rule of law seems to grind exceeding slow, with the courts not yet having disclosed the grounds of the charge on which he is being detained?

Gillian Merron: My hon. Friend has done much to support the case to which she refers. Having sought the Foreign and Commonwealth Office's assurance, I understand that it is providing Mr. Northfield with full consular assistance. Consular staff are in regular contact with Mr. Northfield, most recently on 8 July. He is in good health, and treatment seems to be positive. However, I will ensure that my hon. Friend's comments are drawn to the attention of my right hon. Friend the Foreign Secretary.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Richard Burden: If he will list his official engagements for Wednesday 16 July.

Gordon Brown: This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Richard Burden: As a constituency MP as well as Prime Minister, my right hon. Friend will be aware of the problems that people face with rising household bills, including rising fuel bills— [Interruption.] May I say that Labour Members are aware of the problems faced by people outside the House, even if Conservative Members are not? Does my right hon. Friend share my assessment that while most people understand that the roots of those problems are international in nature, and therefore the room for any single Government is limited— [Interruption.]

Mr. Speaker: Order. Let the hon. Gentleman speak.

Richard Burden: The public also have a better grasp of economics than Conservative Members.
	While most people understand that situation, do they not also want to be assured—

Mr. Speaker: Order. I think that the Prime Minister can answer the question.

Gordon Brown: We will continue to help hard-pressed families who are facing high fuel bills and high food prices because of what is happening in every country in the world. That is why we are raising the winter allowance for 11 million families, from £300 to £400 for the over-80s. That is why we are providing help for low-income households with their fuel bills. In recognition of the problems that people face with petrol, we are freezing petrol duty for the full year. We will bring forward further measures to help families in due course.

David Cameron: It is a wonderful thing; you do not have to finish a planted question to get a planted answer.
	Since this is the last Prime Minister's questions before October, may I take the opportunity to clear up some important issues? First, this week's relaunch was based around the plan to march knife criminals into accident and emergency departments to meet their victims. Can the Prime Minister tell me who came up with that bright idea?

Gordon Brown: Everybody must be concerned about knife crime. Everybody in the House must want to take all the action that is necessary. That is why we propose tougher punishment, tougher enforcement and tougher prevention. On prevention, I think that the right hon. Gentleman would agree that the main proposal this week is that 20,000 families that are in great difficulty will have to sign contracts of good behaviour, and that 110,000 families will be subject to parental supervision. For the first time, we are taking action on all the antisocial behaviour families, and trying to deal with the root cause of the problem.

David Cameron: But why cannot the Prime Minister be straight with people and tell us who thought up the idea? The Home Secretary was asked on television,
	"one of those proposals is that people caught carrying knives should be taken to see people in hospital who have been stabbed...is that correct?"
	She answered yes it is. The next day, in the House of Commons, she was asked the same question, and she said no, it was not. Does the Prime Minister not understand that he will not get decent policies until he works out what went wrong last time? So let me ask him again: who thought of this bright idea?

Gordon Brown: It is right that people should have to face up to the consequences of their crimes. But I am saying—and I hope that there is all-party support for this—that there should be tougher penalties, tougher enforcement with visible policing in our communities and community support officers, and tougher prevention. The main proposal is that every problem family, where action must be taken, should be subject to parental supervision. I would have thought that that should have the support of the whole House.

David Cameron: Once again: absolutely no answer—no one owns up in this Government. Let me try another issue to see if he can be straight on this one—it is car tax. The Prime Minister told me last month at Prime Minister's questions that
	"the majority of drivers will benefit from"—[ Official Report, 4 June 2008; Vol. 476, c. 765.]
	his changes to car tax. It is now clear that that was simply wrong. Will he admit that he was wrong and apologise?

Gordon Brown: I told him in the House in the exchange that we had last week that the majority will be no worse off or better off as a result of what happened. If I may say so, the Conservative party said it would support action against pollution. The leader of the Conservative party said:
	"there will be tough choices to make for the environment and I won't shy away from them for one moment".
	The principle is that the less-polluting cars pay less, the more-polluting cars pay more—that is what he said to the House. On 19 March 2007, he said:
	"telling people...that you can go green without paying the price. That's not leadership. That's not substance".
	But that is what he is trying to do now.

David Cameron: This is not a green tax—this is a stealth tax. The Prime Minister has a nerve to lecture me on consistency. I said he was useless a year ago and I have not changed my mind since. But once again: absolutely no apology, no answer to the question. Let us see if he can give a straight answer on something else. The Government announced today that after months of dithering they are scrapping the 2p tax rise on fuel. Can he tell us whether this decision had anything to do with the Glasgow, East by-election?

Gordon Brown: It is right to announce, as we have done previously, our decision before the House rises. Let me just deal with this vehicle excise duty point and then excise duty. The former Conservative environment spokesman, the Chairman of the Commons Environmental Audit Committee, said:
	"If we are going to use bigger differentials in vehicle excise duty...they have to apply to existing secondhand cars as well".
	He said:
	"the principle is the right principle".
	The Conservatives said "vote blue, go green". They said they were going to take action against pollution. The minute they are challenged on it, they walk away—that is the history of the Conservative party.

David Cameron: The message is vote blue and get rid of this useless Prime Minister. So the fuel duty had nothing to do with the by-election, where it is a massive issue, just as, presumably, the 10p tax U-turn had nothing to do with Crewe and Nantwich, just as the plan to call off the election had nothing to do with the polls. Once again, he cannot be straight with people. Let us try another issue—one that we are debating in the House today. The Prime Minister said MPs' expenses and allowances needed sorting out by this House, yet when there was a vote in this House, leading members of his Cabinet voted against reform, and he did not turn up. So can he tell us why he was not there?

Gordon Brown: It is very unfortunate that the actions of a few people have brought into disrepute the whole House of Commons. It is very unfortunate, because the vast majority of people who come to this House want only to engage in public service. The principles that underline the approach that the Leader of the House is announcing are that there has got to be the maximum transparency, the maximum external audit and the end of the so-called John Lewis list, and to refer these matters to the Commons Committee looking at these very issues, with a view to having a cap on mortgage interest relief and a cap on other expenses. That is the right way forward, and the right hon. Gentleman should admit that there have been problems that he has got to deal with.

David Cameron: The Prime Minister had a chance to vote against the John Lewis list and he funked it—he stayed in the Downing street bunker. He could have come across and voted for it. Yet again —[ Interruption. ]

Mr. Speaker: Order. Let the right hon. Gentleman speak.  [ Interruption. ] Be quiet; let the right hon. Gentleman speak.

David Cameron: Yet again, when leadership was required, he would not provide any. I am beginning to think the only thing in Downing street with a spine is his book on courage. As Parliament rises for the summer, should not the Prime Minister reflect on this: everyone knows there are tough times ahead and everyone knows difficult decisions have got to be taken. Is not the one thing the British people are entitled to is a Prime Minister who can provide leadership and who can tell us the truth?

Gordon Brown: That is why, while the right hon. Gentleman continues to duck the difficult decisions, we will take them. Action against terrorism—he ran away. Education to 18—he ran away. GP access—he ran away. Action against pollution—he ran away. There are all those issues. Nuclear energy—he runs away. During the recess, he needs to address the big substantive issues. This is a Conservative party that gives no answers, offers no solution and has no substance.  [Interruption.]

Mr. Speaker: Order.

John McDonnell: A group of my constituents will be visiting the House today with a petition opposing a proposal associated with the expansion of Heathrow to drive a road through our cemetery, where many of our loved ones are buried. Does the Prime Minister appreciate that the Government now remain, apart from the most rapacious sections of the aviation industry, virtually isolated in their support for expansion of Heathrow? Can I ask him to think again and reassess the environmental, social and economic consequences of a third runway at Heathrow? This will not be interpreted as running away; this will be interpreted as being on the side of our community.

Gordon Brown: It is right to listen to communities when these big decisions are made, and it is right to take into account what local people are saying on these matters. But this is also a big strategic decision for the country and we cannot afford to duck a decision about the future of airports for many years ahead. That is why it is right in principle to go ahead with airport expansion.

Nicholas Clegg: The Prime Minister promised to abolish boom and bust, but now we have got both: inflation is booming, the economy is bust. Energy prices are rocketing, house prices are collapsing, thousands of jobs are on the line, and food prices just go up and up every week. When will the Prime Minister accept that a winter of discontent is just around the corner?

Gordon Brown: I do not know whether the right hon. Gentleman has seen the employment figures today, but employment in this country is at its highest level ever. There are 61,000 more jobs in the economy during the last three months, and while, yes, there are problems, we have inflation that is lower than the rest of Europe and lower than America, we are taking action to take people through these difficult circumstances, which the previous Conservative Government never did when there were problems, and at the same time we are creating more jobs in this economy and we have the flexibility to enable us to withstand events. I would have thought that he would see the economy in its proper context.

Nicholas Clegg: The Prime Minister is so out of touch he does not understand the scale of the problem: 5.5 million British families are in fuel poverty and all he can squeeze out of the energy companies is 26p per week for each of those families; 1.7 million people on low incomes are still waiting for a decent home, and his only feeble response is to buy up fewer than 1,500 empty properties. He is tinkering at the edges, obsessed with details. Will he take a summer break, take a step back, see the big picture and come up with real answers to prevent a winter of misery for millions of British families?

Gordon Brown: The big picture is taking action to help hard-pressed families. When the right hon. Gentleman talks about fuel poverty, he omits to mention the winter allowance paid to 11 million pensioners in this country and costing over £2 billion. When he talks about the utility companies, he is omitting to tell us that there is £100 million to help low-income families, and he fails to mention that 22 million families will receive £120 in a tax cut over the next few months. All these things are necessary to help people through difficult times, but I think that people would prefer our solutions to the problem than his.

Michael Meacher: Since most European Governments are now seeking to take joint action both to stop oil speculation helping to drive up petrol prices and heating costs and to stop vast City bonuses driving unregulated financial markets, is there any reason why our Government should not support both such joint actions from Europe?

Gordon Brown: We are, as I told the House last week, looking at this whole question of speculation in the oil market, but my right hon. Friend has to face up to one fundamental fact that is true: demand for oil, both now and in the medium term, exceeds supply. It is a reasonable expectation that more oil will be wanted in the years to come, and that is the main factor driving the price up. What we have got to do about this, as he would agree, is lower our dependence on oil. That is why we have made the big decision on nuclear power, opposed by the Opposition. That is why we also believe in renewables, including wind power, often opposed by the Opposition. That is why we want to make cars more efficient, and that is why we have incentives for fuel-efficient cars, opposed by the Opposition. These are the measures that we can take and will take, and we will take them with our European partners—again, co-operation opposed by the Opposition.

Mark Pritchard: This week the Government finally acknowledged major affordability gaps in the delivery of the defence training review programme. Given the worsening of public finances, would the Prime Minister give an undertaking to have a review of this undeliverable and unaffordable project, and for once admit he has got it wrong?

Gordon Brown: Our defence budget is rising every year, and it will continue to rise. We will not allow the training of our defence forces to remain inadequate. We now have the second biggest defence budget in the world— [Interruption]—as a percentage of national income. We want to ensure that our troops are properly staffed and equipped, and that is what we will continue to do. That is why we continue to spend money not just on defence but on all the urgent operational requirements of the Army, Navy and Air Force.

John Mann: I am sure the Prime Minister will wish to join me in congratulating—and perhaps will even visit—the Larwood surgery, which won a top NHS award for drug treatment last week. The system that it uses is the same GP-led model that has been introduced successfully by the Social Democrats in Sweden, the Socialists in France and Labour in New South Wales. Is it not time that we considered introducing it throughout the United Kingdom?

Gordon Brown: The Government have funded a number of initiatives relating to drugs, one of which is intended to support the rising number of GPs who are able to help with drug treatment. About 2,000 health care professionals have undertaken the Royal College of General Practitioners' primary care certificate course, which deals with drug issues.
	We will learn from what is happening in Sweden, and we will continue to increase the number of people who are receiving drug treatment. I can tell the House that, even in difficult times, the number of drug misusers being helped by treatment has doubled to nearly 200,000.

Elfyn Llwyd: Does the Prime Minister believe that his party's wilting membership in Wales and my party's increasing membership in Wales are due to the coalition between Plaid Cymru and Labour in the National Assembly, or to his leadership here in Westminster?

Gordon Brown: The fact that there are 100,000 more jobs in Wales is due to a Labour Government and Labour Members of the Welsh Assembly; the fact that more children have been taken out of poverty in Wales is due to a Labour Government and Labour Members of the Welsh Assembly; and the fact that there are more public services in Wales is due to the funds provided by a Labour Government from here.

Clive Efford: Does my right hon. Friend agree that people who cannot afford to buy houses should not pay the price for the current economic turmoil and the tightening of credit in the housing market? His announcement today that hard-pressed families will be helped to get on to the housing ladder is welcome, but does he agree that we must encourage local authorities and housing associations to do more to make affordable houses available for rent?

Gordon Brown: We are using £200 million of public funds to buy up unsold houses in the market. That will help people to rent their homes, particularly people who, on the existing waiting list, cannot obtain homes. We are announcing today that five local authorities throughout the country will be able to set up housing companies to build houses for the first time, and we will support those councils in their efforts to make more stock available for rent. We are also announcing today that, under a rent to home-buy scheme, people who cannot afford to buy a house initially under the shared-equity proposals will be able to start by renting. That is another move forward to help the rented housing sector in Britain.

Mark Lancaster: The current focus on knife crime makes it easy to forget that there are more than 5,000 violent assaults each year involving the use of broken glass. One positive step would be to support the campaign led by my constituent Marjorie Golding, and encourage late-night clubs and bars to replace glass with polycarbonates. Will the Prime Minister be decisive, show some leadership and support the campaign, or does he need more time to ponder?

Gordon Brown: The hon. Gentleman rightly raises the question of injuries caused by glass. I will look into what he says and come back to him on the matter.

Paul Clark: My right hon. Friend will be aware of the importance of volunteers and the voluntary sector in our communities, as amply demonstrated by the Sunlight Development Trust in my constituency, which is leading on social enterprise work and campaigns locally. However, there is concern that central Government support for the third sector must continue, so what steps will my right hon. Friend take to ensure that third sector organisations are reassured about the commitment of this Government to their neighbourhood campaigning and the delivery of complementary services in neighbourhoods?

Gordon Brown: By increasing the grants that we are making available for grassroots community action, £130 million is being provided directly to small community groups, and we are establishing a £70 million community builders scheme to help community-led organisations become more sustainable. At the same time, we are helping youth volunteering by giving more money to the v organisation to encourage young people to get a step on the ladder to community action. I should also remind my hon. Friend that we have strengthened gift aid, which gives millions of pounds to charities by virtue of tax relief. But we will not see the charitable sector, as some Opposition Members do, as a cut-price alternative to public services. We will reinforce the work of the voluntary sector in partnership with Government.

Mark Harper: Does the Prime Minister think that the price of petrol and diesel is too high or too low?

Gordon Brown: It is too high, which is why I am trying to get the oil price down. That is why I went to Jeddah—so that we can have a dialogue between producers and consumers. That is why I am meeting the Nigerian President this afternoon—because there are 1.5 million barrels of oil that could be produced from Nigeria but that, as a result of violence, are not being produced. That is why we met the North sea oil producers a few weeks ago to talk about how they might develop fields in the North sea that are either small fields or fields that are difficult to get at. It is precisely for these reasons that we are taking the action to reduce our dependence on oil overall. It is just unfortunate that the Opposition will not support these actions.

Jessica Morden: The announcement last Friday by the Government and the Association of British Insurers that flood insurance will be widely available long term will be greatly welcomed in constituencies such as mine that border the Severn, where people naturally are concerned about the effects of climate change, but can the Prime Minister reassure my constituents that developing an adequately funded long-term flood defence strategy will remain the priority?

Gordon Brown: We will be spending £800 million on the flood defence strategy by 2011—raising the amount from £400 million a few years ago to £600 million now, and then to £800 million over the next period of time. Last week, we also finalised the agreement with the insurance companies that my hon. Friend mentioned, and it is because we are investing in flood defences that they were prepared to say that insurance against floods will be widely available for homes and small businesses, so that fear that people have had has been removed. However, my hon. Friend is absolutely right—she has campaigned on this—that we must make the investment in flood protection for the future.

Kenneth Clarke: As the Budget continues to fall apart and the Chancellor has had to abandon yet another badly targeted tax, have the Government yet decided how the unfortunate taxpayer will eventually have to pay for the mess he has made of the public finances?

Gordon Brown: I remember when we inherited debt at 44 per cent. of national income and reduced it to 38 per cent. I remember when we inherited rising inflation and brought it down. I also remember that we inherited from the previous Government large numbers of people who were unemployed and have made them employed. When will the right hon. and learned Gentleman remember the fact that 3 million people are now in work as a result of a Labour Government? As for taxation, 22 million people will receive £120 as a result of decisions that we have made.

Peter Soulsby: The Prime Minister will be aware that, following the publication of "The Governance of Britain" White Paper, the Modernisation Committee has heard overwhelming evidence confirming the urgent need for effective parliamentary scrutiny of regional development agencies and other key regional bodies. Will the Prime Minister join me in welcoming the Modernisation Committee's report and its recommendations both to fill the accountability gap at regional level and for us as Members to be able to question regional Ministers?

Gordon Brown: We spend about £2.3 billion through our regional offices and the regional development agencies in each of the regions of England. It is right that there should be proper accountability of that, which is why we are proposing the regional Select Committees. I believe that the Modernisation Committee supports that approach, and I hope that it will be given a welcome from both sides of the House. It will enable regional Members to examine and hold accountable the offices that exist in the regions.

Jo Swinson: The most rapidly increasing type of cancer in this country is skin cancer, of which there are more than 80,000 new cases each year. As the Prime Minister heads to Suffolk for his bucket and spade holiday, I am sure that he will be stocking up on sun cream. How can his Government justify charging VAT on that essential health protection item?

Gordon Brown: This issue is looked at from time to time, but I say to the hon. Lady that the more important thing that we are doing is investing £15 billion over the next 10 years in trying to find cures to diseases including cancer and skin cancer. The action of the national health service in making it possible for people to be seen quickly when they are diagnosed with cancer means that 99 per cent. of people suspected of having cancer are seen within two weeks. Those are the actions that we can take, and they will get rid of skin cancer in the long run.

Sally Keeble: Following this week's welcome publication by the Sentencing Guidelines Council of a report on the sentencing of people convicted of causing death by careless driving, will my right hon. Friend ensure that the section of the Road Safety Act 2006 on causing death by careless driving is quickly enacted and that tough guidance is sent out to the courts so that people who lose their loved ones as a result of accidents caused by such driving know that justice will be done?

Gordon Brown: It is a tragedy to meet people who have lost their loved ones as a result of careless driving; they are innocent people who suffer as a result of someone else's failure. That is why we will implement these guidelines and why my right hon. Friend the Justice Secretary will be going ahead immediately with these proposals.

Norman Baker: The Prime Minister may have seen in today's press the admission by the airline BMI that it intends to fly empty planes this autumn in order to keep its slots open, and that Flybe, for the same reason, is even hiring actors to fly between Norwich and Dublin to boost passenger numbers. Given the massive carbon emissions for which aviation is responsible, is that not an environmental disgrace? Will the Prime Minister take action to prevent those ghost flights, or will he cave in to the aviation industry, as usual?

Gordon Brown: It would be clearly unacceptable if airlines flew without any passengers whatsoever, simply to maintain their slots. We shall look at the matter that the hon. Gentleman raises and talk to the airlines, and I shall write to him in due course.

Adrian Bailey: It is now a year since the introduction of legislation creating smoke-free workplaces and public places. Can my right hon. Friend tell me what assessment he has made of the level of compliance with the legislation, of the public health benefits and of what measures he thinks can be taken further to reduce the level of smoking in this country?

Gordon Brown: The evidence is very interesting: nearly a quarter of a million people quit smoking with the help of their smoking services between April and December 2007—that is a 22 per cent. increase in the number of people who have quit smoking, and it must be directly related to the ban on smoking in public places. We are also investing a great deal more in research into this matter. Cancer Research UK estimates that 40,000 lives will be saved over the next 10 years as a result of this smoke-free legislation, and I believe that there is increasing public support for the action that was taken.

Alistair Carmichael: On Friday, staff in the Maritime and Coastguard Agency will begin a 48-hour strike. During the previous 24-hour strike, the contingency cover that was put in place was barely adequate, and it would not be sufficient to cover a 48-hour strike—as a result, lives will be put at risk. Will the Prime Minister intervene to solve this dispute? Will he pay our coastguards a decent wage, or will he sit on his hands until lives are lost?

Gordon Brown: I will certainly look at the issue of contingency cover to see what is being provided in the event of this dispute. I would, even now, call on the people who are engaged in planning the dispute to cease this action. I think that it is very important that employers and employees get together to find a solution to these disputes. I must tell the hon. Gentleman that 1.5 million workers in the public sector have already signed, or are subject to, three-year pay agreements, including nurses, teachers, and those who work in the Department for Work and Pensions and in the Inland Revenue. Never before have we had three-year agreements during difficult times such as these, and I believe that there should be support for other groups of workers in the public sector signing up to long-term pay agreements.

David Taylor: During his richly deserved holiday in Southwold, will the Prime Minister reflect on present Government proposals that would evict parents from local authority accommodation when their children caused problems in the vicinity? Those of us who were brought up on local authority estates believe that there is a risk that that might demonise such areas. Our experience as MPs tells us that problems with young people originate as often when parents live in owner-occupied accommodation. What will he do in those circumstances?

Gordon Brown: I have looked at the work of the family intervention projects that my hon. Friend is talking about. I have been to see at first hand how families have been brought round, as children who were engaged in vandalism and antisocial behaviour live decent and normal lives as a result of changing their ways. The whole point of the family intervention projects is that families sign a contract to say that they will change their ways in return for 24-hour help in doing better. That is the proper way forward in order to deal with the worst problems of antisocial behaviour. I would have thought that there would be massive support in the country for extending that project to the 20,000 families who will be helped as a result. In the end, if we are to tackle crime we need tougher punishments, better enforcement and action on prevention. Action on prevention will be stepped up over the next few years so that every child is given opportunity but expected to behave properly in our communities.

Closed Circuit Television (Monitoring and Promotion)

Ann McKechin: I beg to move,
	That leave be given to bring in a Bill to impose a duty on public bodies to co-operate with the police and specified local authorities on the use of closed circuit television; to require certain users of CCTV to provide specified information to the police; to require insurance providers to promote the use of CCTV systems; and for connected purposes.
	There has been much debate recently about the level of surveillance in our society. The debate is worth having, although much of the dialogue has been conducted in a fit of hysteria that bears no relation to the reality of our everyday lives. Widespread use of photography and film is here to stay—the relevant question is how we regulate its use to provide legitimate protection of the public and property while at the same time ensuring that our citizens' rights and freedoms are properly protected.
	Time and again, constituents request closed circuit television coverage in areas where vandalism, thefts, drug dealing or violence have repeatedly occurred. It is not an alternative to proper policing or crime prevention strategies, but decent quality CCTV evidence can certainly make a material difference in bringing forward a prosecution. It often records the type of crime that can be difficult to prove by other means.
	Just a few weeks ago in Glasgow, we experienced within one week the tragedy of the murders of two innocent women. The first, Moira Jones, was murdered when arriving back at her home in the south side of the city and the second, Eleni Pachou, was murdered at her place of work in my own constituency. In the same week, there were also reports of five women who were subjected to sexual attacks in broad daylight, all within the space of less than two hours, in the centre and west of the city. Such events are thankfully unusual, but their occurrence over such a relatively short time understandably caused a great deal of fear and alarm. To the credit of Strathclyde police, suspects in all three cases have now been apprehended and it is clear that CCTV evidence played a critical part in the investigations.
	The use of such evidence is now a routine part of police inquiries and it is much more common as a means of pursuing a prosecution in the UK than the use of DNA material. Perhaps not surprisingly it results in far more guilty verdicts, leading to a consequent reduction in police time and expense tied up in trials. In the case of random attacks, it can also help to prompt evidence from witnesses who may not have been aware that they were in the vicinity of a crime at the time of the offence, or that their evidence could be material. Importantly, it can also eliminate innocent people as suspects.
	However, when police gather CCTV evidence, they have to collect it from a wide variety of sources that currently do not have to follow any compulsory code or minimum requirements. It is estimated that there are around 400 town, public or municipal and city-centre systems in the UK, and perhaps up to 1.5 million privately owned and operated public-space CCTV cameras.
	It is important to distinguish between the two groups. The public systems have a primary purpose to provide public safety and, accordingly, they need to include the ability to provide evidential recording for police incidents. In Greater Glasgow, we have the GCASS system, which oversees the use of CCTV coverage in places where the public have unrestricted access and also co-ordinates action by the police, local authorities and the major social landlords.
	However, even with that level of organisation, Strathclyde police find it difficult at times to persuade all the local authorities in its force area to contribute to the revenue costs, which run at approximately £3,000 to £4,000 a year for each fixed camera. The force also has to interface with 16 separate public systems that use different equipment and processes. This leads to both police and prosecutor's staff being tied up in time-consuming evidence gathering and having to spend long periods of time in preparing evidence in a format acceptable to the courts. Regrettably, it is still a requirement in many Scottish courts that such evidence be shown in analogue rather than digital format, despite the fact that the latter is much less costly and is speedier.
	On the other hand, cameras on private property that allow for a public presence, such as shops and bars, are much more likely to be primarily a property protection scheme. However, given the scale of private coverage compared with public systems, it is evidence from private cameras that, on the whole, will provide the majority of film evidence in a crime incident. During last year's terrorist attack on Glasgow airport, for example, I understand that more than 70 per cent. of the film and photo evidence came from such private sources.
	When a serious incident occurs, police have to contact all public and private owners in the vicinity, first to check whether they hold such equipment and secondly to ascertain whether film has been kept that is of a quality capable of being of use. The major problems that police face when collecting such evidence is the poor quality of the images and the fact that redundant technology is used because of a failure to invest in appropriate equipment.
	Speed is also vital, as some owners routinely destroy film within a couple of days, and others within a few weeks. However, the police do not necessarily know that, and there is no requirement on equipment owners to provide details. In addition, owners of smaller, more basic systems may be unfamiliar with the mechanisms required to download the data. It has not been unknown for it to take several weeks to be able to obtain some film evidence. It is also not uncommon for cameras not to be working at all or to be wrongly positioned so that no relevant evidence can be obtained. All of these problems can have a direct effect on the ability of police to arrest the perpetrator of a crime.
	If we believe that all of us, as citizens, should take some level of responsibility in relation to the crime on our streets, then I do not consider that it is unreasonable to expect those who operate CCTV systems to have a duty of care to the general public by following best practice and keeping equipment in good working order. Public trust could dissolve easily if there were increasing evidence of misuse, and that is why we need to guard against poor handling of data by persons with little or no training. We also need to guard against the degrading of data to keep costs low by reducing quality for convenience and cheapness of storage, and the use of worn out and redundant equipment.
	However, I also accept that, given the scale of their use and the fact that many of these cameras are operated by small business, sometimes as a requirement of their insurers, it is important to avoid undue bureaucracy and administrative expense. The Bill accordingly proposes a proportionate response that builds on the recommendations of the Home Office report issued last year for a national CCTV strategy, and the voluntary code promoted by the CCTV user group that acts as an industry body.
	First, the Bill would place a statutory duty on public bodies such as local authorities, transport groups and housing associations to work together with their local police force to achieve a streamlining of public systems. That would give greater efficiency and reduce administrative costs. One example of how such an obligation could be of use at a fairly minimal cost is for all CCTV used only for traffic monitoring purposes to be given basic digital recording equipment suitable for police use, and an image-retention facility.
	The Bill would also place an obligation on authorities to contribute to the costs of co-ordinating such systems where, as in Glasgow, the system is maintained by a large metropolitan authority that covers a number of smaller council areas. Secondly, the Bill would require private organisations that control large areas that are open to the public, such as cinemas, hotels, shopping centres or large bars and clubs, to provide the local police force with up-to-date information on the type of CCTV system that they use, on how long they preserve film for, and on how the system is maintained. Given that many such premises are already licensed by local authorities in some way, I would argue that the additional obligation should not be unduly onerous. It would allow the police to map town and city centre locations where there is the highest footfall, and to provide information to private users on the best way to maintain and operate their systems.
	Finally, the Bill would require insurance companies to promote an agreed code of practice with their business customers. That could include requirements relating to: the type and scale of equipment that should be used, and appropriate to the site size; use and location; the training that should be provided to staff; and the adoption of regular maintenance contracts. That would have the benefit of securing an improvement in the overall base quality of the use of CCTV in this country and of providing a platform for minimum standards that can easily be reviewed and altered.
	 Question put and agreed to.
	Bill ordered to be brought in by Ann McKechin, John Robertson, Mark Lazarowicz, Rosemary McKenna, Nia Griffith, Helen Jones, Angela E. Smith and Miss Anne Begg.

Closed Circuit Television (Monitoring and Promotion)

Ann McKechin accordingly presented a Bill to impose a duty on public bodies to co-operate with the police and specified local authorities on the use of closed circuit television; to require certain users of CCTV to provide specified information to the police; to require insurance providers to promote the use of CCTV systems; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 17 October, and to be printed [Bill 139].

Opposition Day
	 — 
	[18th Allotted Day]

Members' Allowances

Mr. Speaker: We now come to the main business, an Opposition day debate on Members' allowances. I have selected the amendment in the name of the Prime Minister.

Theresa May: I beg to move,
	That this House recognises growing public concern on expenses and allowances for hon. Members and Members of the European Parliament (MEPs); believes that the minimum requirements for tackling the problem include regular reporting and appropriate auditing of the use of expenses and allowances, the publication of claims made, broken down by type, in relation to each allowance and claimable expense, the publication of the names and salary bands of all relatives employed by hon. Members and the abolition of the so-called John Lewis list; further believes that UK MEPs should abide by the same rules and practices as hon. Members, with particular regard to the repayment of surpluses, published annual statements verified by independent accountants and overseen by a compliance officer, the publication of the names and salary bands of any relative employed and regular reporting of expenses and allowances; and resolves that, notwithstanding its decision of 3rd July, hon. Members should no longer be able to claim reimbursement for furniture and household goods with effect from 1st April 2009.
	Some hon. Members may wonder why, two weeks after a debate on MPs' expenses and allowances, we have brought forward another motion on the subject. Two weeks ago, the Commons had the opportunity to put its house in order, to clear its name and to go some way to restoring public confidence in Parliament as a body and hon. Members as individuals. It failed to do so. Members voted to keep the John Lewis list and rejected a system of external auditing. The newspapers, which had welcomed the report from the Members Estimate Committee, were accordingly negative about the vote taken by this House. Of course, we should not be driven by the media— [Laughter.] I say to those hon. Members who are laughing that we should listen— [Interruption.]

Mr. Speaker: Order.

Theresa May: rose—

Patrick Cormack: Will my right hon. Friend give way?

Theresa May: If my hon. Friend will allow me, I should like to make a little progress with my speech first, but I assure him that I am happy to take interventions later. We should not be driven by the media, but we should listen to the views of our constituents. It is incumbent on every Member to understand the depth of feeling on the issue outside the House. The result of the vote on the MEC report has compounded a general lack of respect for politicians.

Don Touhig: rose—

Theresa May: As I have just said to my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), I shall be happy to give way in a few minutes. I should just like to make a little progress with explaining why we brought forward such a debate at this time.
	We believe that the matter is so important that we should not let it rest after the vote on 3 July. I hope that the House will show that, having reflected on its decision on that day, it is now willing to move forward and make the changes needed to restore public confidence. In short, we need to show not only that we recognise the depths to which we have sunk in the public mind, but that we accept our responsibility to do something about it.
	We are honourable Members, but our failure to recognise the concern outside the House about our processes and that people expect us to adopt the best practice shown in the private and public sectors, has led to cynicism and, I believe, damage to the reputation of the House, and we need to address that. That is why we have chosen today to show leadership on this issue, to debate the motion to show that Members of Parliament take this seriously and that we are willing to clean up our acts and be deserving of the office that we are privileged enough to hold.

Patrick Cormack: This is a bit reminiscent of the nasty party speech that some of us remember. It really is a pity that this has become a party political issue. This is a matter for the House of Commons, and because today we have a helpful written statement from the Leader of the House, and because the Government amendment is not all that different, would it not better serve the interests of the House and of our constituents if the Leader of the House, the shadow Leader of the House and the Liberal spokesman put a collective hot towel round their heads, went away and came back with an agreed position that we could all adopt, without a vote, so that we could get on to debating the issue that really does concern our constituents? Before sitting down, I want to apologise to my right hon. Friend for having to leave before the end of the debate, but I am chairing my Select Committee.

Theresa May: When my hon. Friend refers to getting on with issues that concern our constituents, only on Tuesday of this week I had an e-mail from a constituent raising a number of issues relevant to my constituency, but it started with this sentence:
	"Talking amongst my friends, the anger does not subside with regard to MPs' expenses and the way in which public funds are being used to finance second homes and pay family."
	That is a reflection of the views that constituents hold on this issue.

Several hon. Members: rose —

Theresa May: I should be grateful if hon. Members would allow me to answer one intervention before I take any more.
	That is a reflection of constituents' views on the issue. We are offering the House an opportunity to come to a consensus on a position that would move the House forward in a way that we failed to do on 3 July.

Don Touhig: The right hon. Lady referred to our decision a week or so ago on external auditors. Would she accept that the National Audit Office is a credible external auditor and does she welcome the statement by the Leader of the House that it will now be involved in the external audit of all these matters?

Theresa May: I will come on to the statement made by the Leader of the House and the Government amendment in relation to the National Audit Office. In fact, that amendment does very little to take us further than the present position of the NAO as the auditors of the House, because it talks about processes, not about going behind Members' signatures, which was the point of the external audit proposals in the MEC report that were rejected by the House.

Jim Devine: rose—

Douglas Hogg: rose—

Theresa May: I give way to the hon. Gentleman and then to my right hon. and learned Friend.

Jim Devine: The right hon. Lady is absolutely right. My constituents are talking about this, and their concern is that they will see the situation where the only people who can come to this place are rich Tories. I have been told that the leader of the Conservative party has a £20 million trust fund. Is that the case?

Mr. Speaker: Order. These are personal matters.  [Interruption.] Order. Hon. Members know the rules. If an hon. Member is going to be criticised or attacked they should be notified in advance.

Theresa May: Thank you, Mr. Speaker.
	Of course we want people from all sorts of backgrounds to be able to play their part in this House, but we also need to ensure that taxpayers' money is being used properly and that our constituents and taxpayers see that it is being used properly.

Several hon. Members: rose —

Theresa May: If hon. Members will just be a little patient, I said that I would give way to my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg). I will then give way to the hon. Member for North Southwark and Bermondsey (Simon Hughes) and then to the hon. Member for Milton Keynes, South-West (Dr. Starkey), who has been seeking to intervene rather a lot, and then I should like to make some progress.

Douglas Hogg: May I associate myself with the comments made by my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack)? Historically, this matter has been for the House, not for whipped party votes. Therefore I have difficulty in understanding why it is being debated on the Supply day. Incidentally, as we do not live in unfurnished boxes, why should there be a prohibition on reimbursement for furniture and household goods? Provided that it is modest, transparent and audited, what is the objection?

Theresa May: I shall expand on that point later in my speech. I believe that it is one of the issues of most concern to our constituents. It is not essential for Members who come to the House and look for other accommodation to have a flat of their own that they need to furnish.
	My right hon. and learned Friend mentioned whipped votes on this issue; I merely point him to the fact that it is because the Government were unwilling to stand by the Prime Minister's undertaking to support the Members Estimate Committee report—they failed to whip the votes—that the House is in this position today.

Simon Hughes: The thrust and direction of what the right hon. Lady is saying has warm support from the Liberal Democrat Benches. However, she must accept that we would not be in the mess that we are in today if 21 Conservative Members of Parliament had not voted against openness and transparency, rather than in favour of it. If they had voted with her, what she and I want would have gone through on 3 July.

Theresa May: I note the hon. Gentleman's support for the general thrust of what I am saying, but I merely say this to him. The House would not be in this position today if the 29 Liberal Democrat Members who stayed away had turned up to vote on 3 July. They included the right hon. Member for Sheffield, Hallam (Mr. Clegg), who, significantly, failed to show leadership on the MEC report.

Phyllis Starkey: rose—

Theresa May: I did say that I would give way to the hon. Member for Milton Keynes, South-West as well.

Phyllis Starkey: I thank the right hon. Lady. May I urge her to take the wise advice given her by the hon. Member for South Staffordshire (Sir Patrick Cormack)? I do not often agree with him, but I do on this occasion.

Simon Burns: You don't often smile, either.

Phyllis Starkey: I shall pass over the misogyny from the Tory Benches, which one expects; I sympathise with the right hon. Lady on that, as she also suffers from it. I draw her attention to how the debate has gone thus far and point to the evidence that it is giving of the danger of trying to make this a party political issue. In particular, members of the public may recall that the most stupendous examples of abuse have largely come, in the last Parliament and this, from members of her party.

Theresa May: On that latter point, I should say that there are examples of problems with the use of allowances expenses in respect of Members from all parties in the House.

Chris Bryant: Name them.

Theresa May: I could name hon. Members from the Labour party, but I do not intend to, because I want this debate to be about how we take the House forward.

Kevan Jones: Will the right hon. Lady give way?

Theresa May: No. I said that I would make progress after I had taken the intervention from the hon. Member for Milton Keynes, South-West; I shall take some more interventions later in my speech. As I think hon. Members realise, I am normally generous in taking interventions.
	I say to the hon. Member for Milton Keynes, South-West that the interventions that there have been that suggest that everything is tickety-boo and that we do not need to look at the issue again reflect an unwillingness to listen to the views out there. It is for all of us to understand those views.

Kevan Jones: rose—

Judy Mallaber: rose—

Mr. Speaker: Order. The right hon. Lady is not giving way. Ms Mallaber, you should sit down.

Theresa May: As a party, we have taken a lead in ensuring that information is published about Conservative MPs. In October, we called for greater transparency. My right hon. Friend the Leader of the Opposition announced the introduction of the right-to-know form, under which all Front-Bench Conservative MPs are required to detail all their expenses and allowances. The overwhelming majority of Back-Bench Conservative MPs are also providing that information, which will all be published later today.
	We are committed to transparency, disclosure and the right-to-know details, and the information will be published. It will include details about Members' staff, including family members and their salary bands. It has a breakdown of office costs, travel, communications allowances, the additional costs allowances and the costs of staying away from home.

Judy Mallaber: I voted for the Members Estimate Committee report, because we do need to clean up our act. Personally, I claim a very small amount of the additional costs allowance. Can the right hon. Lady explain to me why I should be lectured and forced into whipped business by a party whose leader claims all of the additional costs allowance—more than £21,000—towards his mortgage? I do not do that. Why are we being pushed into whipped business by somebody who makes such a claim?

Theresa May: Whether the Government choose to whip their Members on this issue is a matter for the Government and the Government Chief Whip, not for me.

John Redwood: As someone who would like the whole House to come to a sensible judgment on this, I urge colleagues to calm down a little and understand that a real problem has been highlighted by this debate. We are where we are with this debate. Does my right hon. Friend agree that the problem with introducing audit for individual items for a household or flat is that we will go straight back to the John Lewis list? The auditors, of course, will want a reference point, and it is the list that has done so much to drag this House into the mire in the public mind.

Theresa May: I agree that the issue of the John Lewis list is the one that has perhaps struck the public mind most as a matter of concern; it is symbolic of the public's concern about the House. That is why it is important that we do something about the list beyond simply asking that its future be considered.
	The right-to-know form that will be published later today is reflected in the terms of our motion. We are asking the House to agree a basic set of principles for a system of expenses and allowances that would be tougher than the regime agreed on 3 July. It is necessary to restore confidence in the House, and I hope that all Members will have that in mind when they come to consider the matter later.

Kevan Jones: Most of us in the House have one single source of income—our parliamentary salary. The right hon. Lady and her party leader talk about transparency. Will she publish the exact details of the 40 directorships held by members of the shadow Cabinet and of the 65 separate occasions on which, according to the latest Register of Members' Interests, paid employment was done by members of the shadow Cabinet?

Theresa May: The hon. Gentleman clearly does not need me to publish those details, as he was reading them from a published document—the Register of Members' Interests. Members of the shadow Cabinet abide by the rules and requirements. The hon. Gentleman might look to the fact that not only Members on the Conservative Benches hold external appointments and directorships.

Rob Marris: Will the right hon. Lady give way?

Theresa May: I shall give way one further time, and then make some progress.

Rob Marris: On that latter point, I should say that I think we should ban moonlighting. However, I do not think that my constituents expect me to live in an unfurnished bedsit in the distant suburbs. My accommodation expenses amount to about £650 per month, and I am 10 minutes from the House of Commons; I think that pretty reasonable. My constituents do not expect me to carry a bed down on the Virgin Trains service every week because I do not have an additional costs allowance to buy a bed in London. Why does the end of the Opposition motion state that
	"Members should no longer be able to claim reimbursement for furniture and household goods"?
	My constituents do not expect me to sleep on the floor.

Theresa May: I have already made the point—I will come to it again—about the importance of the John Lewis list to the House's being seen to clean up its act.

Brian H Donohoe: Will the right hon. Lady give way?

Theresa May: No.
	Reference is made to the John Lewis list by the Leader of the House in the Government amendment and in her written ministerial statement today. There is a real difference between abolishing the John Lewis list and replacing it with an Ikea list, and getting rid of the right to claim for TVs and fridges on the taxpayer. The hon. Gentleman mentioned beds, but not every hon. Member coming into the House has to rent or get a mortgage for an unfurnished flat; he knows that full well.

Ann Widdecombe: Will my right hon. Friend give way?

Theresa May: Before I took that last intervention, I said that I wanted to make a little more progress. My right hon. Friend should bear with me; I am sure that she will be able to keep her question until later.

Ann Cryer: rose—

Theresa May: I say that to the hon. Member for Keighley (Mrs. Cryer) as well.
	The principles of our motion are based on transparency, and it includes a reference to "appropriate auditing". As we discussed on 3 July, auditing is important because it is best practice outside this House, and we should show that we are willing to abide by that. Proposals in the MEC report would have brought this House into line with best practice not only in the private sector but elsewhere in the public sector. We need to achieve transparency by publishing a comprehensive breakdown of expenses claims made by Members to prove that we are using public money correctly. As from later this year, the House will publish Members' expenses together with all the claims and receipts. We will continue with the commitment that we made to publish right-to-know forms on Conservative Members later today.

Ann Cryer: rose—

Linda Gilroy: rose—

Brian H Donohoe: rose—

Theresa May: If hon. Members will just wait— [ Interruption . ] I thank the Leader of the House for pointing out that several Members wish to intervene on me. I have already made it clear that I am willing to take further interventions later, but I wish to get beyond this point in my explanation of our motion because—who knows?—that might answer some of the questions that hon. Members have. I suspect that they were pre-arranged questions anyway, but there we are.
	The need for transparency also lay behind our proposal that Members should declare on the register any family members whom they employ. That has now been agreed by this House following a review by the Standards and Privileges Committee. We are going further in relation to the right to know by publishing the salary bands of family members as well as their names. During the debate on 3 July, the expense involved was cited as a reason for not going further on the recommendations on auditing and publication. However, the House needs to operate by the same rules that operate elsewhere in the private and public sectors; that is why it is important that we explore this point.

Ann Cryer: rose—

Linda Gilroy: rose—

Brian H Donohoe: rose—

Ann Widdecombe: rose—

Theresa May: I am happy to give way to my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) first, and then to the other three hon. Members. I will then go on to talk about the John Lewis list, so the hon. Member for Central Ayrshire (Mr. Donohoe) might wish to wait until I have done that before he makes his point.

Ann Widdecombe: I am grateful to my right hon. Friend for giving way and for the number of times that she has already done so. She said a few sentences ago that it was not necessary for hon. Members to have a second home that needed to be furnished. Let me put it to her that if hon. Members buy their second homes, as opposed to renting or going into hotels with their families, the taxpayer gains because hon. Members have to pay the capital of their mortgage—that is not given to us by anybody—and in the end, when they sell, they pay the Exchequer capital gains tax. There is therefore a direct and much under-discussed benefit to the taxpayer in our choosing to buy rather than going into a hotel.

Theresa May: To correct my right hon. Friend, I did not say that it was not necessary to have a second home, or, as she further implied, to furnish it at the expense of the taxpayer.  [ Interruption . ] It is amazing that Labour Members do not seem to have heard of the concept of renting furnished flats, but I will not go into that. My right hon. Friend drew a distinction between the capital element and the interest element of a mortgage. The capital element relates to the fact that the house or flat remains in the ownership of the individual Member of Parliament. The point about furniture and household goods is that they remain in the ownership of the individual Member, who is able to take them on to a further property as opposed to simply possessing them as a Member of this House.

John Mann: The right hon. Lady will recall that she agreed with my amendment, passed unanimously by the House last week, which removed the potential loophole whereby people could nominate two main homes, one under the additional costs allowance and one for capital gains tax purposes in relation to the Revenue. Can she confirm that that point has been taken fully into consideration in the statistics on her Front Benchers that she is providing today, that nobody among them has worked that loophole and that everything is consistent with the current House position?

Theresa May: The figures that will be published today are based on the right-to-know form that was published earlier this year. I have a certain sympathy with the intention of the hon. Gentleman's amendment, but there are some practical issues involved in implementing it.  [ Interruption . ] He says that there are not. He will be aware, however, that there are rules for claiming for a home under the ACA. HMRC has different rules, and there is a choice on whether a house is claimed as the main house for capital gains tax purposes. The House authorities will need to consider those issues in interpreting the amendment in terms of the rules that will be put into the green book. The House took a decision, and I have every confidence that it will be implemented.

Linda Gilroy: Notwithstanding what the right hon. Member for Maidstone and The Weald (Miss Widdecombe) said, will the list that is to be published this afternoon indicate the capital gain for Members who use all their allowance to purchase a property? The John Lewis list is a smokescreen for that.

Theresa May: It is not possible to do that, because one is not able to list a capital gain until one sells the property and knows what the capital gain on it is.

Ann Cryer: The right hon. Lady's comments are worth clarifying. Does she understand that new Members entering the House, particularly Labour Members with no inherited wealth whatsoever, may be put off buying a flat because they have no money to buy furniture for it, including basic things such as a bed, and may as a result be shoved into renting a furnished flat or a hotel room that will cost the taxpayer a great deal more money in the long term?

Theresa May: I take considerable umbrage at the suggestion that everybody on my side came into the House with inherited wealth. There are Conservative Members who would also find it difficult to cope with the arrangements that we are putting in place. It will be difficult for some Members, but it is possible. Hon. Members have alternatives available to them—they do not need to go out and buy their TV on the back of the taxpayer.

Brian H Donohoe: rose—

Theresa May: I said that I would make progress and discuss the John Lewis list, because the hon. Gentleman has a specific question about it. Let me explain the reference in the motion. There has been public dismay about the concept of being able to buy a TV on the taxpayer—that is one of the issues that has most concerned people and about which they have been particularly vocal. I accept that most Members did not know of the John Lewis list before it was revealed in the court case, but it has become symbolic. Several hon. Members have made comments about initial requirements, but it is not just about that. The John Lewis list—that is, the ability to claim through the ACA money for furniture and household goods— continues throughout the time that a Member of Parliament is in this House, so it is not just a question of buying basic requirements from the allowance that is available. I believe that we should, as the MEC report suggested, remove the ability to buy furniture and household goods through the ACA. That is a different position from that taken in the Government's amendment.

Brian H Donohoe: I became a Member of Parliament in 1992 and I was taken to the Fees Office, where I was instructed that I could spend money anyway I wanted on the additional costs allowance by a Mr. Maskell, who I think was in charge of the Fees Office then. I have never had any guidance since, other than the contents of the green book, which gives no indication of a John Lewis list. I sit on the Administration Committee and such a list has never been debated there. Where did the John Lewis list come from? I can give the right hon. Lady the answer, but I wonder whether she knows.

Theresa May: I am grateful for that intervention. It is true that, when people have become Members of Parliament at different times, the Fees Office has given different advice about how to interpret the allowances. Over the years, the House, through the Members Estimate Committee and officers in the Department of Resources, has been tightening up those rules to try to clarify them and to ensure that Members know more about exactly what they can claim. Some Members' past claims will be based on a previous regime, and were entirely appropriate under it, but they would not be acceptable today.
	To answer the question about the John Lewis list, I believe that officers in the Department of Resources, formerly the Department of Finance and Administration, introduced it with a view to ensuring that, when staff considered claims by Members of Parliament, they had a checklist against which they could decide whether the claim was reasonable and whether Members were trying to get more out of the taxpayer than they needed. For example, they would see that Members were buying a fridge for x amount and would try to ascertain whether they could buy a cheaper fridge that was equally functional. The purpose of the John Lewis list was to help staff determine whether claims were appropriate. Whatever the intention at the time, the term has come to cause concern. However, the ability to claim the items, rather than the term and the existence of a list, worries the public.

Brian H Donohoe: I thank the right hon. Lady for giving way again. Her stance does not relate to the fact that hon. Members also have access to an incidental costs allowance for offices. If the Opposition were serious about the matter, they would have included in the motion the same barriers to the incidental costs allowance as to the additional costs allowance. One could buy a mahogany desk—or anything—to furnish an office. Surely it is wrong to be able to do that when one does not have the right to buy the furniture that is required for a flat.

Theresa May: There is a distinction between buying furniture for an office, which is perhaps in a constituency and provides a service to constituents, and a television or a fridge for a Member of Parliament. There is a genuine difference, and the public perceive it. They recognise that office costs are needed to provide a service to constituents.

David Anderson: rose—

Helen Jones: rose—

Theresa May: I know that many hon. Members wish to speak and I am conscious that time is passing. I have been generous with taking interventions and I now want to get on with my speech because I want to deal with the expenses of Members of the European Parliament and the transparency rules to which they are expected to adhere because the spotlight has fallen on them.

Andrew Slaughter: Will the right hon. Lady give way?

Theresa May: The hon. Gentleman has just heard me say that I want to make progress, so I suggest that he contain himself a little.
	We believe that we need to establish equivalent requirements for MEPs. That is why the Conservative party has published a new code for Conservative MEPs on the use of expenses and allowances. They have undertaken to abide by the rules of the European Parliament on the payment of expenses and allowances to Members, and to fulfil additional requirements for transparency and accounting in their allowances and expenses. Those will be published in the way we are publishing the expenses and allowances claims for Members of Parliament. We are taking action unilaterally and I hope that it means that Conservative MEPs will abide by additional transparency rules, over and above those of the European Parliament. The Labour party is not adopting those rules for its MEPs and I hope—[Hon. Members: "We've already got them."] Several Labour Members claim from a sedentary position that I am wrong, and I will deal with that shortly. There is a genuine difference between the requirements that the Labour party places on its MEPs and those that we will place on ours. Conservative MEPs will have an equivalent requirement for publishing expenses to the one that we place on Members of Parliament. That gives me an opportunity to consider the Government amendment.
	When I first heard about the amendment, I believed that we were making progress. After the vote on 3 July, the Prime Minister said:
	"I was not happy about what happened. I was disappointed... now we must look at the issue of expenses and accountability again."
	Given that the Leader of the House moved quickly on MPs' addresses—a statutory instrument on that is being considered tomorrow—I thought that she would introduce concrete proposals on allowances that would mean progress before the recess. However, it has taken today's debate to make the Government do anything about the matter or make any proposals to the House. I fear that we give the public the impression that we are willing to move when it comes to protecting ourselves, but not when it comes to protecting taxpayers' money and showing that we are doing that.

Helen Jones: rose—

Theresa May: Let me get a little further because I want to make a specific point about the John Lewis list.
	Instead of a clear decision about the John Lewis list, the amendment would refer it to the Speaker's Advisory Panel on Members Allowances. Far from removing MPs' right to buy items such as TVs and fridges on the taxpayer, the Government would retain it. According to my reading of the amendment, we would effectively replace the John Lewis list with the IKEA list. The Leader of the House's statement does not take us much further because she offers us Government consultation on capping the extent of claims to 10 per cent. of the additional costs allowance—nearly £2,500 every year.
	Under the Government amendment, the taxpayer would still foot the bill for MPs' furniture and household goods. I do not believe that that is acceptable and that is why we have specifically rejected that aspect of the current arrangements in our motion. The Government also suggest that the task of rewriting the green book, which is currently a matter for the Members Estimate Committee, should be given solely to the Speaker's advisory panel. The Speaker's Advisory Panel on Members Allowances is a different animal from the Members Estimate Committee. It has a Government majority and its remit is purely advisory. Perhaps when the Leader of the House responds, she could say whether she intends to change the remit if she is asking the panel to rewrite the green book rather than simply advise the Members Estimate Committee about it.
	The second half of the Government amendment deals with the role of the National Audit Office and it has two parts. I believe that the first part, which tackles what the NAO should do in considering the rules that the House operates, is contrary to the NAO's legal powers under the National Audit Act 1983, which states that the provisions
	"shall not be construed as entitling the Comptroller and Auditor General to question the merits of the policy objectives of any department, authority or body in respect of which an examination is carried out."
	Assuming that the amendment means that the Government are asking the NAO to say whether the rules are correct, or, as was suggested on the radio, that the John Lewis list is being replaced by an NAO list, the NAO does not have that power and therefore could not effect the intention.
	The second part of the amendment that deals with the NAO covers what it already does. It already audits on a random basis all the allowances that Members claim and the controls and processes that the Department of Resources uses. That part of the amendment is therefore superfluous. Far from giving us a more rigorous audit regime, the amendment does nothing.
	The amendment also deals with MEPs' expenses. I said that I would state the differences between what Labour and Conservative MEPs do. The Government claim in their amendment that they have open and transparent procedures, but they are far from open and certainly not transparent. The requirement on Labour MEPs is to submit themselves to an audit. The results are not published and I do not believe that anyone even has to publish details of who does the audit for Labour MEPs. We are bringing our MEPs' expenses into the open in the same way as MPs' expenses are being brought into the open. I hope that the Government will be prepared to bring their MEPs' expenses into the open at the same time.

Kevan Jones: I am grateful to the right hon. Lady for giving way. Will she indicate today whether the Conservative party will make the measure retrospective, so that we can see what the crooked Tory MEPs have been up to over the past few years?

Daniel Kawczynski: On a point of order, Mr. Speaker—

Mr. Speaker: Order. I am sorry, but I was speaking to an hon. Member when that remark was made. The hon. Gentleman must withdraw that remark, or qualify it.

Kevan Jones: I am sorry, Mr. Speaker—I will just say "creative use of their expenses", then.

Theresa May: I would simply tell the hon. Gentleman that I have already set out that, later this year, Conservative MEPs will publish details of their expenses and allowances. They will be subject to a rigorous regime; Labour MEPs will not be subject to that rigorous regime.
	The Government amendment is disappointing. We have a chance to work on the issue, to change the current system and to ensure that we move the House forwards in a way that meets the requirements of the public. But instead, we have taken a half-hearted and tentative step. The public deserve better than that indecision. When the Government referred the issue to the MEC back in February and put the proposal before the House, the Prime Minister wrote to Mr. Speaker and said:
	"Labour MPs want to cooperate fully with your review, with its findings, and with any further requirements it may make upon them and we will insist that this happens."
	Sadly, that did not happen, because a majority of Labour MPs voted against the MEC report, which meant that it did not go through. The Government did not show leadership, with 33 Ministers, including five Cabinet Ministers, voting against the reforms in the MEC report.
	We have an opportunity today to make good some of the damage done by the vote of 3 July and to show the public that we are deserving of our office and their votes, and that we did not enter the House to take advantage of the taxpayer. We understand the privileges and responsibilities of being a Member of Parliament. We are willing to place on ourselves the same sort of requirements for transparency and the checking of our expenses and allowances that we expect other people to place upon themselves. We should not consider that we are different simply because we are Members of Parliament. We should be willing to adopt the same sort of practices that are best practice in the public and private sector elsewhere.

Harriet Harman: I beg to move, To leave out from "(MEPs)" to the end of the Question, and to add instead thereof:
	"believes that all British Members of the European Parliament (MEPs) should follow all the open and transparent procedures voluntarily adopted by Labour MEPs; further to debate in the House on 3rd July on the control and audit of the public money spent by hon. Members carrying out their duties, further believes that there should be a re-writing of the Green book by the Advisory Panel on Members' Allowances, augmented by two independent external appointees; further believes that the Panel should keep the Green Book under review and advise on any further modifications, including in relation to reimbursement of reasonable costs of a second residence, to include abolition of the so-called John Lewis list; and further believes that an external financial audit by the National Audit Office, covering all the allowances in the Green Book, should include the rules and guidance on what is and what is not acceptable under the rules, the management controls and processes used by the Department of Resources to ensure compliance with the rules, and the checks and testing of the controls to ensure that they are adequate and effective.".
	Let me start by agreeing with the points that were made by the right hon. Member for West Derbyshire (Mr. McLoughlin) and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). It is unprecedented for the House to be debating, as whipped business, matters that are traditionally decided on a free vote. Opposition day debates are by definition partisan and are whipped by both the Opposition and the Government. What the Opposition have done with their motion is to take House matters, which are by custom and practice decided on a free vote, and make them into whipped business. That is regrettable.
	Let me turn to the substance of the debate. Our starting point is the health of our democracy. That depends on two things. It depends on us as Members fulfilling our responsibilities—doing the work that is expected of us in our constituency, and here in the Chamber and all the Committees of the House. Unless Members are London MPs, as I am, they have to live in two places—in their constituency and in Westminster—and to travel between that constituency and Westminster.
	As MPs, it is our responsibility to help with our constituents' problems, to listen to their concerns and to play a leading role in the life of our constituency. To do that effectively Members must have a good team of staff. I pay tribute to my hard-working team of constituency staff. Our constituents write to us, e-mail us and phone us, and they expect, quite rightly, that we should reply. They come to our surgeries and expect, quite rightly, that we will take up their case. They expect us to tell them what we do. That is why most of us have websites and some of us do annual reports.
	I, and many others in the House, believe in equality. We believe that to be MPs, we should not have to depend on private wealth to do our job and carry out the responsibilities placed upon us by our constituents.

Andrew Tyrie: I have a great deal of sympathy with what the right hon. and learned Lady has just been saying, but with regard to communication with constituents, does she not think that the time has come to look again at the communications allowance? Is it not the case that, as the Chairman of the Public Administration Committee said, it is an exercise in shameless self-promotion? Has not the communications allowance, too, brought us into disrepute, and is it not time we reviewed it?

Harriet Harman: No, I do not agree with the hon. Gentleman. Before the communications allowance was introduced, I used to do an annual report for my constituents, setting out what I had done in the previous 12 months and inviting them to comment on the priorities that I had set for the next 12 months. I probably used the incidental expenses provision outside the rules, but I thought that it was very important to communicate with my constituents. It was to deal with such matters that the communications allowance was introduced. I do not think that it is disreputable for hon. Members from any part of the House to tell their constituents what they are doing. When the public know what MPs are doing, they are more supportive and can get involved.

Patrick Cormack: The Leader of the House knows that I am entirely with her in her opening remarks, but frankly, the communications allowance is an abuse. Any self-respecting Member of Parliament knows how to be well known in his or her constituency. We had years without the allowance. I have never claimed a penny of it and I have no intention of ever doing so. Neither I nor the hon. Member for Bolsover (Mr. Skinner), nor many of the Members present, need that sort of thing to be decent constituency MPs.

Harriet Harman: The communications allowance is not mentioned in either the Opposition motion or the Government amendment. I said what I believe to be the case about it—and it was decided by the House that we would have a communications allowance.

Daniel Kawczynski: I am grateful to the Leader of the House for giving way. I totally concur with her about how hard-working our staff in our constituencies are, in dealing with sometimes very emotional and difficult cases. My secretary, Mrs. Helen Sheppey, does a marvellous job. Does the Leader of the House share my concern about the way in which the media report on our expenses? Some constituents actually believe that the money comes directly to us. The media are part of the problem, because some constituents do not realise that the money goes to other people, rather than to us. The media are to blame for that.

Harriet Harman: It is wrong for the media to give the impression that the money that is available and is paid directly to our staff—our having deposited contracts of employment and job descriptions for those staff doing the work—is added to our pay. The media should not imply that that money goes into our pockets. That is why it is so unfortunate that one Member of the House did not respect the proper rules and brought us all into disrepute.

Jo Swinson: The Leader of the House was talking about the expectations that our constituents have of us. Does she not accept that our constituents also expect us to have an expenses regime that is transparent, accountable and fit for the 21st century, rather than something more akin to an old boys' club? For that reason, does she not think that the vote on 3 July was incredibly damaging to democracy? Although I believe that the Members Estimate Committee report did not go far enough in proposing a radical overhaul of the system, it will have beggared belief among her constituents that we voted against better accountability and better scrutiny of our expenses.

Harriet Harman: I agree with the hon. Lady that our constituents expect openness, transparency and a properly enforced system. If she will allow me, however, I should like to get on with explaining how I think we can achieve that in the House.

Andrew Tyrie: Will the right hon. and learned Lady give way?

Harriet Harman: I have already given way to the hon. Gentleman once, so I will press on with my speech for the moment. The allowances are to help us to do our job.

Don Touhig: Partly to respond to the hon. Member for East Dunbartonshire (Jo Swinson), can we make it absolutely clear that the recommendation of the MEC for an external audit never intended that that audit should be published? A myth has grown up as a result of that debate that the external audit recommended by the MEC was to be made public. It was never to be made public; that was not the recommendation. Can we make that clear in the House?

Harriet Harman: My right hon. Friend is right on that point. Our allowances are important for us to do the work that sustains public confidence, but we know that it undermines confidence in the House, and in us, if they are abused. We all know that the public are angry that a small number of Members have misused allowances. We want to ensure that that does not happen in future. It is not just the public who are angry. Most hon. Members are angry, because all of us who work hard and obey the rules are stained by the misconduct of a few, and the reputation of the House, which we hold dear, is undermined.

Anne Main: It is not only hon. Members who abuse the allowances who are pilloried by the press. Hon. Members who comply completely with the rules are also abused by the press. Indeed, the issue is used as a party political football by some people who aspire to enter this place. It is completely wrong that we should not look at this matter again, in the light of the fact that this is a media-driven thing. People who use their allowances properly should not feel bad about using them.

Harriet Harman: I agree with the sentiment behind what the hon. Lady says. However, building on what the House decided on 3 July, we will be able to give ourselves, as well as the public, more assurance that the rules are clear, and will be properly complied with by all of us.

Andrew Tyrie: rose—

Kevan Jones: rose—

Harriet Harman: I will not give way to the hon. Gentleman, but I will give way to my hon. Friend the Member for North Durham (Mr. Jones).

Kevan Jones: The right hon. Member for Maidenhead (Mrs. May) suggested that Labour Members of Parliament had been abusing the system. However, is not the reason why this matter has such a high public profile the fact that every case of Members abusing the system that has gone before the Standards and Privileges Committee has involved Conservative Members?

Harriet Harman: We have only to check the reports of the Standards and Privileges Committee to understand the point that my hon. Friend is making about the situation in Parliament.
	Earlier this month, we made decisions on pay and allowances. We set up a system that will rightly prevent us from voting on our own pay increases in future. Instead, they will be set by an independent review body. We have also made decisions to improve the system of allowances. On 3 July, we agreed that no staff should be paid out of public funds unless evidence of their employment—a contract of employment and a job description—had been deposited with the House authorities. We also agreed that there should be a strengthened system of audit.
	As Leader of the House, it is my responsibility to consider how we put the will of the House into effect. That means implementing the resolutions of 3 July and considering how we can build on the clearly expressed view that we need to do more to ensure that the rules are clear and properly enforced, so that we protect public money and the reputation of the House.

Andrew Tyrie: Will the Leader of the House give way?

Harriet Harman: I will not give way to the hon. Gentleman again; I have already given way to him once.
	After the vote on 3 July—and certainly before this debate was called by the Opposition—I have had a number of discussions with hon. Members, with the Chair of the Committee on Standards in Public Life, Sir Christopher Kelly, and with the Comptroller and Auditor General, Tim Burr. I have also prepared a written ministerial statement, which I have laid before the House this morning, and which forms the basis of our amendment to the Opposition motion. I want to reassure the House that what I have set out in my written ministerial statement today and in our amendment to the Opposition motion is based on a programme of work and discussions that I have been undertaking, and that it is not in any sense a response to this Opposition day debate.
	I would like to outline briefly the measures that will build on the decisions the House took on 3 July, in respect of which I intend to issue a consultation document. The key elements include the proposal that the green book that sets out the rules on entitlements to allowances should be rewritten by the Advisory Panel on Members' Allowances, in the light of decisions taken by the House on 3 July, and to abolish the so-called John Lewis list. The Advisory Panel on Members' Allowances will keep the green book under review and advise on any further modifications to the rules that may be required, including in relation to reasonable costs of a second residence. I will consult on including capping furniture costs at 10 per cent. of the additional costs allowance. The membership of the Advisory Panel on Members' Allowances will be increased to include two independent external appointees.

Theresa May: In my speech, I expressly asked the right hon. and learned Lady to address the issue of the remit of the Speaker's advisory panel and to clarify whether the next rewrite of the green book will be a matter solely for the panel. Is she suggesting a change to the rules so that the MEC will have no role in that?

Harriet Harman: The green book is ultimately a matter for the House, but the important thing is to give to the Advisory Panel on Members' Allowances, augmented by two independent external appointees, the responsibility of keeping the green book under review and ensuring that proposals come forward, including on the question of the reasonable cost of second residences.

Linda Gilroy: On the additional costs allowance, is my right hon. and learned Friend sympathetic to revisiting the issue of central provision of accommodation—not, as it has been caricatured, in a single block somewhere in central London, but in a range of rented accommodation—and, more importantly, to having the House authorities hold any capital gain, or indeed any loss, if Members are here for only a short time?

Harriet Harman: I will be issuing a consultation document, and the Advisory Panel on Members' Allowances will be looking at this issue. My hon. Friend will no doubt be able to contribute to those processes.
	The key elements will also involve an external financial audit by the National Audit Office that will cover all the allowances in the green book, not just the additional costs allowance. It will also cover travel, staffing costs, incidental expenses provision for other office costs, and the communications allowance. Furthermore, the NAO financial audit will be extended to include an NAO audit of the rules and guidance on what is and is not acceptable under the rules, an NAO audit of the management controls and processes used by the Department of Resources to ensure compliance with the rules, and NAO checks and testing of the controls, to ensure that they are adequate and effective. I propose that the NAO should report to the Members Estimate Audit Committee, which will include three external independent members.
	I am encouraged that the Comptroller and Auditor General believes that, given the additional evidence to be provided in support of claims, there is an opportunity to strengthen significantly the assurance that public money has been properly spent.

John Mann: What time scale is my right hon. and learned Friend putting on the final decision making on these issues?

Harriet Harman: The consultation document that, as is set out in my written ministerial statement, I will be putting forward, includes the strengthening of the audit and the putting into effect of the decisions of 3 July. The written ministerial statement has been put before the House today, and I expect to issue the consultation document shortly. It would be appropriate for us to have concluded that aspect of our work before the publication of the green book on hon. Members' expenses in the autumn.

Simon Hughes: Following that last question, can the Leader of the House confirm that if, after the consultation, we adopt the approach that she is consulting on—which will involve trying to undo some of the decisions that we made a fortnight ago—there will need to be a vote here, and her Back Benchers will need to vote for the proposals, not against them?

Harriet Harman: I hope that support for reasonable audit will come from across the House. The National Audit Office proposals—which were put to the MEC but which did not form the subject of the MEC's proposals—provide a good way forward, and I hope that the whole House will agree that they would provide us with the assurance that we need that public money is being properly spent in respect of all Members' allowances.
	I now turn to the question of the European Parliament. As long ago as 2000, Labour Members of the European Parliament who were concerned about the lack of accountability for spending on allowances in the European Parliament introduced their own system. This includes, among other provisions, an independent financial audit for each MEP's total expenditure every year, which is then published on their website. For eight years, the UK's Labour MEPs pressed for other UK parties to follow this example. Until eight years later, when the Leader of the Opposition announced his so-called "deep clean", nothing was heard from them. At Government level, we have raised with the President of the European Parliament the need for greater accountability for spending by all the European Union's MEPs.
	In conclusion, if the Government amendment is carried today—and pursuant to my written ministerial statement—certain things will happen.

Theresa May: The Leader of the House made a statement a couple of minutes ago about the National Audit Office and the Members Estimate Committee report. She said that the MEC report did not include references to external auditing by the NAO, but it did—in recommendation 2, under audit and assurance. Will she explain how what she is proposing now differs from the MEC proposals?

Harriet Harman: It differs in a number of ways. It goes beyond the additional costs allowance to include travel, staffing, the incidental expenses provision and the communications allowance. It will not only look into the spending of individual Members, but audit the Department of Resources to make sure that the rules are effectively applied.

David Hamilton: May I bring us back to a housekeeping issue? The consultation will take place for nearly three months over the House of Commons recess, so will the Leader of the House ensure that there is a dialogue, and that people can be contacted to try to clarify any points during the recess? That is a simple matter of housekeeping.

Harriet Harman: My hon. Friend makes an important point. I want to reassure people that when the House returns after the recess, there will be an opportunity to consider the proposals further.
	As for the abolition of the "John Lewis list", which is mentioned in both the Opposition motion and our amendment, I remind the House that that was a list that no MP had ever heard of until it appeared in the newspapers.
	I will consult on the proposals I have set out, so that when the House returns in the autumn, we will be able to put into effect new rules and a new system of audit that gives Members and the public the confidence that the payment of expenses is on a proper footing so that we can all get on with the job that our constituents elected us to do, which is not to debate and discuss ourselves, and our own pay and allowances, but to focus on them and on their day-to-day concerns, and to take the action that they want us to take in the interests of this country.

Simon Hughes: Although it is controversial, I am glad that we are having this debate today.

Patrick Cormack: You would be.

Simon Hughes: Yes, I would be, because the House made a bad mistake on 3 July. This is a brave move and the Leader of the House is right to bring the matter back to the Floor of the House.
	I start with what I hope will be non-controversial comments, so I guess that what I say after that will be more controversial. First, I join the Leader of the House and the shadow Leader of the House in paying tribute to our staff. We could not do the job the public expect of us without our extremely hard-working, diligent and committed staff. They are often in the front line of people's life tragedies, dramas and pressures, which sometimes means that they encounter threats of suicide, fears of eviction tomorrow, deportation today and so forth. The reality is that they do a fantastic job.
	Let us be clear. At the moment, the allowance for our staff is something between £90,000 and £100,000. To put it simply, that means that if we have four staff fully on the payroll as I do—two here and two in my constituency office—and if we include national insurance, they are receiving something in the order of £20,000 to £25,000 each. That is the amount if we divide the cake four ways. If we had fewer staff, they would of course get more, but this is what we are talking about. We are not talking about staff earning £30,000, £40,000, £50,000 or £60,000 as part of a staff team; rather, it is a wage that other people with the same abilities working in the private sector would vastly exceed. I hope that we are clear about that and that it is not a matter of dispute. Our staff do a very important job for us.
	We need to clarify what happened in the famous debate of 3 July. Some areas were not controversial and were agreed. There were 14 substantive recommendations from the Members Estimate Committee: they were unanimously proposed by the right hon. Member for Penrith and The Border (David Maclean), the hon. Member for Middlesbrough (Sir Stuart Bell), my hon. Friend the Member for North Devon (Nick Harvey), the Leader of the House, the shadow Leader of the House and Mr. Speaker.
	Of those 14 recommendations, those on constituency offices and communications, of which there were two, and on travel, of which there were two, went through without any dissent. Two substantive issues, emanating from the amendment proposed by the right hon. Member for Islwyn (Mr. Touhig), were disputed and were not agreed. First, three different recommendations put forward a clear proposal, which everyone here will understand:
	"We recommend that, with immediate effect, Members should no longer be able to claim reimbursement for furniture and household goods or for capital improvements".
	Secondly, it was proposed that
	"new MPs elected to the next Parliament to represent constituencies in outer London should be eligible to claim half of any overnight expenses allowance; and all MPs representing those seats should be restricted to claim half the standard rate".
	That was to deal with the perceived abuse surrounding colleagues in outer London who were claiming in respect of two homes, irrespective of the fact that they lived just over the line between inner and outer London and were actually able to get home relatively quickly. They received the full allowance on the same basis as a colleague living in Orkney, Shetland, Cornwall, west Wales or the like.
	The third proposal that was not accepted was that
	"the Additional Costs Allowance be adapted into an overnight expenses allowance, comprising a £19,600 maximum budget for accommodation (excluding furniture, household goods and capital improvements) but operating on the basis of itemised reimbursement and a flat rate of £30 for daily subsistence."
	That was the proposal and it meant that MPs could have furnished accommodation, stay in a hotel or have the money for the purchase of accommodation as well as a daily rate for subsistence, but that the allowance did not include furnishing.

John Spellar: Is not all this in the nature of a differential allowance? In such a scheme, there is a always border and a line, and anyone with any experience knows about London weighting allowances. There will always be people living just one side or the other of a border. Unless we have an overall national rate, that will always apply, so is not the hon. Gentleman putting forward a rather silly argument?

Simon Hughes: No, it is not a rather silly argument and it is not my argument. It is an argument supported by the top salaries review people, by Sir John Baker in his report and by the Members Estimate Committee. The argument is that the abuses of some people who live nearby—only 20 to 25 minutes away, in some cases—and have two homes have to be reined in.
	The final set of proposals from the MEC, which were backed up by the independent review, suggested that there should be a full audit of all expenses, not just of the additional costs allowance. The amendment, which was carried, limited audit to the additional costs allowance and not the other things.

Kevan Jones: I think that the hon. Gentleman has fallen into the same trap as many others since that debate in believing that the MEC report has somehow become the Ark of the Covenant and that everything in it was wonderfully transparent. The fact of the matter is that if we had voted for the proposal, we would have given ourselves £4,200 a year—an unreceipted, tax-free bung. Secondly, on the audit of offices and other aspects, the proposal was not for a financial audit but for £1,500 a day to be paid to consultants for snooping around offices. What I am in favour of, which is being proposed now, is a rigorous audit of all budget heads. What the hon. Gentleman is talking about is not what was being put forward— [Interruption.]

Simon Hughes: I am afraid to say, as the right hon. Member for Maidenhead (Mrs. May) is saying, that the hon. Gentleman is misrepresenting the position— [Interruption.] I am reading it; the proposal is in front of me. The recommendation was quite clear:
	"there should be a robust new system of practice assurance involving regular financial health checks on records kept and processes used in Members' offices with outside professional teams covering about 25 per cent. of Members each year and every Member each Parliament".

Don Touhig: rose—

Simon Hughes: I shall give way to the right hon. Gentleman in a moment.
	The difference was that it would have been an audit of everything, not just—  [Interruption.] Potentially of everything. It was not just of the additional costs allowance. Most people out there cannot understand why we are not willing to have everything audited and willing to have only some things audited.  [Interruption.]

Mr. Deputy Speaker: Order. The hon. Member for North Durham (Mr. Jones) might not like what he is hearing, but I would be grateful if he did not keep chuntering from a sedentary position.

Simon Hughes: I give way to the right hon. Member for Islwyn.

Don Touhig: I am grateful to the hon. Gentleman, who is being generous in giving way. Does he accept the point that I and perhaps others made on the day of that debate? I was concerned about the cost of the assurance, which I think we had difficulty justifying, but will he support me in killing off the myth that the external audit proposed by the Members Estimate Committee was to be made public? It was never to be made public. That was the recommendation. We have this myth growing up that, somehow, what we have done is secretive and that what we could have done would have been transparent. It was never to have been transparent. It was never to be told to the world.

Simon Hughes: On that point, I absolutely agree with the right hon. Gentleman. I am trying to ensure that where there is consensus, we have it. The difference was that it was an audit of everything. I share concerns that we should not have a hugely expensive process with millions of quid going to the private sector, but that would not have been the implication had we voted for the motion tabled by the Members Estimate Committee.
	I come now to discuss the issues that are, I guess, less controversial. First, I think we made a bad decision on 3 July. I made that clear in my speech at the time and I make it clear again today. The tough audit proposals were voted against by 172 MPs: 149 Labour, 21 Conservative, one independent and, bizarrely, our new UK Independence party Member, who voted in both Lobbies. He must explain that.

Linda Gilroy: Will the hon. Gentleman give way?

Simon Hughes: Not for a moment. Every one of my Liberal Democrat colleagues who was here—  [Laughter.] No, no, no. Every one who was here voted in favour of the tough and transparent system, and 55 per cent. of our parliamentary party was here. All of them voted for the open system. Of the—

Don Touhig: Will the hon. Gentleman give way?

Simon Hughes: No, not for a second. Of the Conservatives, 54 MPs voted for the open and transparent system and 21 voted against. Had those 21 voted for, we would not be in this mess because the amendment would not have been carried. That means that only 27 per cent. of the Tories were in favour of the open system. There were 201 Labour Members here and voting. Of those, 52 were in favour of full transparency and 149 against. That means that only 14 per cent. of the parliamentary Labour party voted in favour of an open system.

Several hon. Members: rose —

Simon Hughes: I will make one last point and then give way to the hon. Member for Plymouth, Sutton (Linda Gilroy).
	Even if every one of my colleagues had been here, there would not, contrary to what the right hon. Member for Maidenhead (Mrs. May) suggested, have been a majority against the amendment. Had her Tory colleagues voted with her, there would have been and we would not be in this mess.

Linda Gilroy: As we are all honourable Members, will the hon. Gentleman take it from me that those of us who voted differently from him did so because we did not think that the proposal was robust, effective, transparent and representative of good value for taxpayers' money?

Simon Hughes: The hon. Lady will have to explain to her electorate her vote on that day, as we all have to do. All I can say is that the external pressure, which arose for reasons that we all know, for us to have the most robust, the most open and the most transparent system has been greater than ever. As a result of consensus recommendations made to us by senior colleagues and endorsed by the Committee on Standards in Public Life, we were given an opportunity to do something about that and we bottled it. That is why the Leader of the House has this morning, out of the blue, produced proposals in a written statement to try to rescue the Labour party from the predicament that its own Back Benchers got it into. As she says, those proposals would have to come back to the House to be voted on.

Andrew Robathan: I am most grateful to the hon. Gentleman for giving way, and I should say that I voted against the amendment tabled by the right hon. Member for Islwyn (Mr. Touhig) on grounds of transparency.
	The hon. Gentleman is raising sanctimony to a new art form. Where was the right hon. Member for Sheffield, Hallam (Mr. Clegg) and where were the other 29 Liberal Democrats, if they felt so strongly about this? Everybody else was to blame, but oh no, not the Liberal Democrats.

Mr. Deputy Speaker: Order. Before the hon. Member for North Southwark and Bermondsey (Simon Hughes) responds to that question, may I say that I know there is considerable interest in the matter outside the House? I understand that hon. and right hon. Members want to make their points and make their position clear, but we should remember the duty that we all owe to ourselves as Members of Parliament and to the House of Commons. We should debate this matter calmly and constructively.

Simon Hughes: I will answer the question calmly and constructively. My right hon. Friend the Member for Sheffield, Hallam was here for the first votes, but he had a long-standing commitment way out of London, to which he went, and he had to leave in the early part of the evening. Other friends who could not be here were at public events—my hon. Friend the Member for East Dunbartonshire (Jo Swinson), for example. The answer is that some of my colleagues were not here, like other Members, but most of them were and every one of them voted for the open and transparent system.

Several hon. Members: rose —

Simon Hughes: No, no. I am going to press on because colleagues—

Don Touhig: Will the hon. Gentleman give way?

Simon Hughes: I have already given way to the right hon. Gentleman.

Several hon. Members: rose —

Simon Hughes: No, no. The Leader of the House therefore thought that she had better respond to the Conservative motion by producing something that tried to take things forward.  [Interruption.] The Leader of the House protests that that is not fair, but it is on the Order Paper today as a written statement—not yesterday, the day before or last week, but today. There was no notice of it coming. I honestly believe that the general interpretation is that it is a response to the fact that we are having the debate today. If it is not, I apologise, but it seems mighty strange that it just happened to appear on the same day and after we saw the motion tabled.

Harriet Harman: I ask the hon. Gentleman to withdraw that and accept the word that I have given the House, which is that the work that I was undertaking was under way, following the 3 July vote. I had discussions with, for example, the Chair of the Committee on Standards in Public Life and the Comptroller and Auditor General long before we realised that an Opposition day debate was tabled, and indeed discussed with them the value of a written ministerial statement. So I had already discussed the timetable of the written ministerial statement with them. I think the hon. Gentleman should withdraw what he said. I take offence at what he has said about what I have told the House. The work was under way; it was not a response to the Opposition day debate, and he should not choose not to believe me on it. I do not think that is fair.

Simon Hughes: The right hon. and learned Lady and I have known each other for a long time. I am not misrepresenting her. Of course I accept what she says about the talks having been under way since 3 July. I know that; I accept it. The only thing I am observing is the slightly strange coincidence that the written statement landed on the Order Paper today and that we heard about it only once we knew there was going to be a debate today. Only freedom of information requests will tell, I guess, when it was decided to include a statement on the Order Paper today. The rest I absolutely accept; I do not dissent at all.
	Under the right hon. and learned Lady's proposals, the John Lewis list would be abolished. That would be a good thing. There would not be a complete abolition of the payment for household goods and things in a property, as recommended—there would still be a possibility of spending on those, amounting to 10 per cent. There would be an audit, which is what was proposed two weeks ago. So this must be an attempt to scramble back and put things together after what the right hon. and learned Lady voted for was not carried because her colleagues—by a large majority of 3:1—did not follow her into the Lobby on 3 July. That is good; the Government have realised that we cannot go on as we are. If the voices that come from this place today make that absolutely clear, that must be a good thing because the sooner we get out of this mess, the better.

Greg Mulholland: May I try to put this matter in simple terms, in spite of the chuntering and the side swiping? Is it not the simple reality of the situation that although the reform package might not have been perfect—would any package have been?—it nevertheless would have represented a huge step forward in restoring public confidence? Anyone voting against it for any reason was mind-blowingly stupid and arrogant.

Simon Hughes: That is my view, and my hon. Friend, blunt Yorkshireman that he is, puts the case clearly. We had a proposal that would not have been perfect, but that would have been miles better than where we were. Some of us voted for it, but, sadly, the majority did not.
	I shall say quickly what the Liberal Democrats will do, because political parties must deliver on the matter, as well as the House as a whole. The day after the vote, my right hon. Friend the Member for Sheffield, Hallam announced that we would implement for ourselves the MEC proposals. We will have spot checks for all Liberal Democrat MPs. We will have independent auditing of our expenses. Every one of our shadow Cabinet members will publish all their expenses, as my right hon. Friend has done, and as Conservative Front Benchers will do. Ours will be published by next Tuesday so that people can look at them, and they will be published on a regular basis thereafter. That is the right thing. There may be questions, but at least everyone will be able to see the facts.
	One of the reasons why the European Parliament is often discredited is that people perceive MEPs as being on a gravy train. As someone who has never been an MEP, may I say that it has looked like that even to those of us who support the European Parliament, the European Union and the rest? My friend Chris Davies, a Member of the European Parliament for the north-west, was one of those who said earlier this year that such practices had to stop, private reports in the European Parliament had to be made public, and abuses in the European Parliament had to end. I pay tribute to his work.
	We are committed—as the Labour party has been, to an extent, for a while, and as the Tories are belatedly, having made a mess of their expenses in the European Parliament for so long—to declarations by everyone who is elected as to whether they are a member of the parliamentary pension scheme, whom they employ as assistants and whether they are members of their family, and the band of payment within €10,000 bands; nothing being used to cover personal expenses, or to finance subsidies or gifts of a political nature; annual accounting of the allowance; certified independent certification of all the expenditure; annual publication by everyone of everything that they spend; proper contracts; publication on the website, with the consent of staff, of those who work for them; publication of all the service providers; subsistence allowance claims to be published on the website; and generally, complete transparency.
	All parties in the House are moving to that being the regime in the European Parliament.

John Spellar: Will the hon. Gentleman give way?

Simon Hughes: I shall not give way again.
	I hope that everyone in the European Parliament will go down that road, but some Members of the European Parliament from countries that are absolutely resistant must learn that if they are to give credibility to the European Parliament elected next year, they too need to follow the example being promoted by colleagues such as Chris Davies. I hope that the European Parliament will learn the lesson, and that its reputation will be enhanced as a result. We will support the motion on the Order Paper. I hope that it will produce a speedy consultation, a speedy response, a speedy proposal from the Leader of the House, and a vote that goes the right way when the House returns from the summer recess.

Several hon. Members: rose —

Mr. Deputy Speaker: Order. Before I call the next speaker, I remind the House that Mr. Speaker has put a 12-minute limit on Back-Bench speeches, which applies from now on.

Stuart Bell: I am grateful, Mr. Deputy Speaker. You made an intervention a few minutes ago about the value of the House of Commons. We need to keep in proportion the fact that this is a House of Commons debate, and that we are an important part of Parliament. I will return to that in my final remarks.
	I will not follow the speech of the hon. Member for North Southwark and Bermondsey (Simon Hughes) in relation to the European Parliament, which is not my remit. He made some other pertinent points, however, to which I shall refer during my speech.
	The hon. Member for South Staffordshire (Sir Patrick Cormack), who is still in his place and follows such debates as a great parliamentarian, has a great dislike of the communications allowance. It is remarkable how often that view is reflected on the Conservative Benches. In an age in which we get little from our media and have to deal with our constituents through the prism of the media, I would have thought that an allowance that enabled Members of Parliament to communicate with constituents in a non-partisan way about what we are doing would be welcomed throughout the House. The hon. Gentleman would certainly welcome the fact that the MEC report proposed to freeze the allowance at £10,000 for three years from next April.
	I enjoyed the speech of the right hon. Member for Maidenhead (Mrs. May), as I did her speech on 3 July—she made the speech that I would have made, so it saved me from making it. I agree with many of her points, certainly in relation to the role of the National Audit Office and the thorough work that it is doing now, which will continue. One of the ironies of today's debate, and the proposal to extend the role of the National Audit Office to do an audit of 25 per cent. of MPs throughout the whole Parliament, is that that was a recommendation of the MEC. I welcome the fact that the Leader of the House has now taken it on board.
	The issue that has created the most mayhem among Labour Members is that of practice assurance, which was intended to assist MPs in their roles before they ever got near a National Audit Office full audit. According to our paper, the essence of the scheme was
	"to help Members compile and record better evidence of their claims; to check on the uses to which parliamentary resources have been put rather than (as now) verifying only the initial expenditure"—
	getting behind the signature, as we said—
	"to clarify rules and guidance; to set a standards framework; to improve office systems and avoid errors; to support both internal and external audit."
	There was a system behind that recommendation which enabled Members to put their house in order if need be, without reference to the dreaded Standards and Privileges Committee. That has been removed by the will of the House, and we are now faced with a simple audit.
	As we go along, we will need to find out what was the purpose of those audits, to what purpose they will be put, and to whom they will refer. My right hon. Friend the Member for Islwyn (Mr. Touhig), who is no longer in his place but follows such debates, was perfectly right: the NAO is exempt from the Freedom of Information Act, audits are exempt from that, and there would be no question of reporting to FOI people that there was an audit and what the consequences were.
	I was not able to speak in the 3 July debate, which was truncated and covered two subjects: addresses and allowances. I do not propose to use my time today to go through all the arguments that took place then. The MEC had a clear view from the beginning—which was 24 January, when the Government gave us the review, rather than February. First, it was to reassure the public, and secondly, to do so in a way that enabled MPs to carry on their jobs in a complex society, which imposes great demands, to which the Leader of the House has referred, in e-mails, the internet and a host of other ways. The question was how do we relate and give confidence to the public, and also allow MPs to continue with their work.
	Many comments have been made about the media coverage. We live in a world in which to keep in touch with civil society, the political society must cross the media bridge. If we cannot do so, there will be a great deal of criticism in the popular press and in our constituencies. There was no greater outrage than in my constituency Labour party when the MEC report was turned down. That was not a happy day for the House. Fewer than half the Members of Parliament voted on the matter, and that would be our criticism—not who voted which way, or which party voted for what, but that only half the MPs thought it appropriate to be here to vote on the question of their salaries and allowances.
	When the MEC report was published, and the members of the MEC—the right hon. Member for Penrith and The Border (David Maclean) and the hon. Member for North Devon (Nick Harvey)—gave a press conference, it was well received by the media, and that converted into being well received by the public. We had begun to restore the reputation of the House. That fell catastrophically, as we knew it would, when the report was rejected, which brought some damaging and serious headlines, which I will not repeat now. However, it was clear—the hon. Member for North Southwark and Bermondsey has touched on this—that matters could not be left as they were on 3 July. A number of recommendations had been accepted, including that of my hon. Friend the Member for Bassetlaw (John Mann), and other recommendations were hanging in the air. It was not clear how we were to go forward, but the Members Estimate Committee always said that it would fully respect the will of the House.

Kevan Jones: Does my hon. Friend not think that it would have been better with hindsight to have produced a draft report and consulted Members on both sides of the House? They could have put forward some suggestions and amendments so that we might have had a degree of consensus about the way forward when the final report was produced.

Stuart Bell: I agree entirely with my hon. Friend, although I would point out to him that when the Government sent this issue down to the Members Estimate Committee on 24 January, we said that we would need until October to go through the report with the utmost care, to consult a whole host of bodies, such as the National Audit Office, the Comptroller and Auditor General, the Inland Revenue and outside bodies, and then to get the support, if we could, of the 1922 committee—the Conservatives' Back-Bench committee—the parliamentary Labour party committee and then the House. We failed to do that. It is clear that our report had public support through the media, but it did not have the support of the House. The reason for that—I concur with my hon. Friend the Member for North Durham (Mr. Jones) on this—is that we did not have the time. If we had had more time, we could have looked at the issue more carefully, taken other matters on board and explained what we were trying to do, but we were not able to do that in the short time that we had. It would also have been preferable had the House been able to discuss allowances separately from pay, but the two came together on the same day, and things got very confusing and very confused. The result was not what it might have been, and the consequence is that we are here today debating the matter again.
	Although this might be ironic, the fact is that it is a Conservative Opposition day motion that has brought the issue to the Floor of the House and which gives me the opportunity to make the speech that I could not make on 3 July. I am aware that the Leader of the House has had discussions with the Chairman of the Committee on Standards in Public Life and the Comptroller and Auditor General and that she has been very active since 3 July. I entirely accept what she has said about those discussions, but the fact is that the time scale for this second debate is longer, and we are therefore able to make some points and to take on board what the Government are now saying in their ministerial statement. I would surmise that we would still have had the ministerial statement had we not had today's debate.
	On the ministerial statement, I welcome the commitment of the Leader of the House to bring within the purview of the original decision by the House an extension of the powers of the National Audit Office to cover all the allowances in the green book, as the MEC proposed, rather than just the additional costs allowance, as well as travel, staffing costs, incidental expense provisions for other office costs and the communications allowance.
	I welcome the fact that the green book will be rewritten—another recommendation by the MEC—and that that will be carried out by the Advisory Panel on Members' Allowances. I wish the right hon. and hon. Members on the panel well. We met them and discussed our report with them as we went along, and I know that they are diligent and will seek to equate the interests of Members with those of the taxpayers who fund our Parliament.
	I welcome, too, the statement by the Leader of the House that the National Audit Office should report to the Members Estimate Committee, which already includes three external members. Incidentally, I also welcome the fact that the work of the Advisory Panel on Members' Allowances will also be assisted by two independent members.
	I also welcome the assurance from the Leader of the House that the Comptroller and Auditor General believes that there is an opportunity, given the additional evidence to be provided in support of all claims, significantly to strengthen the assurance that public money has been properly spent.
	The House will decide on the motion and the amendment before it. I have enjoyed the comments of the hon. Member for South Staffordshire and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), but the House must bear it in mind—this brings me to your original comments, Mr. Deputy Speaker—that what was at the forefront of the MEC's thinking in its review was the reputation of this House, balanced with the interests of Members. We have heard many comments about the role of Members and their heavy work load. On our salary and allowances, I have consistently taken the view that it is a privilege to be a Member of Parliament, and that privilege must be guarded with a sense of responsibility.
	The Leader of the House and the right hon. Member for Maidenhead have referred to the fact that the reputation of the House has taken a battering over these past few months, but the House may soon have the power to declare war and it may take over the royal prerogative. It debates and decides on major issues, such as war and peace, human embryology, radical changes to society, justice and civil rights. It is still the fulcrum of the nation in times of crisis and of debate on national issues. I remember the debate on the Falklands war. I was not in the House at the time, but perhaps other hon. Members were. There was a debate in the House on the Saturday morning after the Falkland Islands had been taken over by the Argentines, and the question was what we should do. The entire nation listened to our debate on the radio—we were not on television in those days—which shows how important the House of Commons is in our affairs.
	Restoring and enhancing the reputation of the House must be a matter for us all. If what we are doing today will add to the reputation of the House in a manner that is transparent and which gains public support, we may find ourselves on our way towards achieving that. I therefore support the Government's statement and their amendment. I wish the advisory panel, which is in the hands of my right hon. Friend the Member for Warley (Mr. Spellar), well. I also wish the National Audit Office, the office of the Comptroller and Auditor General, the Department of Resources, the Members Estimate Committee and the House of Commons Commission well.
	There is a great deal of work to be done in the House between now and the general election to restore the reputation of this Chamber and this institution. If we fail to do that, Members of Parliament—whoever we are and from whichever party we come—will be castigated for failing to get a grip on the matters of perception that so involve our constituents. As the Leader of the House said, we do not live in an age of different regimes. The regimes have changed, and we must change. We must be responsive to public opinion. We have failed up to now. Let us hope that, from this day forth, we begin to re-establish the reputation of the House of Commons.

Patrick Cormack: I am grateful to Mr. Speaker for putting me on the list of those who want to speak in the debate because I have to chair a Select Committee. I want to speak very briefly and I certainly do not want to take up my 12 minutes.
	I intervened on my right hon. Friend the Member for Maidenhead (Mrs. May) because I am extremely sad that this has become a party political issue. With the greatest respect, this is a misuse of an Opposition day. It would have been more appropriate for us to have debated the issue on another occasion or, if we have to give up time on an Opposition day, we should have had a free vote. Now, as far as I am concerned, this is a free vote—every vote in the House is a free vote as far as I am concerned—so I shall behave accordingly. The Chief Whip knows that, and we have the most amicable relationship, which I trust will long continue.
	I am extremely concerned about the reputation of the House. I fundamentally and deeply believe that almost all Members of the House are honourable Members. I believe that they serve their constituents diligently, that most of them work very hard and that they deserve the appellation of honourable Member. What has happened over the past few months in particular is that the silly, misguided and, in some cases, downright wrong actions of a few Members have put us all in a difficult position. That we can all regret, both individually and collectively.

Kevan Jones: All Tories.

Patrick Cormack: It does not matter from which side of the House they came; the fact of the matter is that certain Members have—

Kevan Jones: Will the hon. Gentleman give way?

Patrick Cormack: I will not give way because I want to be brief. I deplore the fact that the hon. Gentleman is trying to make party politics out of this. I have made it quite plain that most people here are entirely honourable, and that goes for my colleagues on this side of the House and for colleagues on the other side of the House. There have been a few bad apples in the barrel. During the 38 years that I have been here, they have been pretty evenly distributed around the House of Commons, and I do not wish to make any capital out of that at all.
	Of course we want a system that is—I do not particularly like the word "transparent"—open and honest and which people can understand. However, we also want a system that we do not need to be apologetic about. That is why I so endorse the comments made from time to time by my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe), who is the quintessence of the right hon. or hon. Member. Much as I disagree with her on some issues, and we know which they are, she has constantly and rightly pointed out that Members of Parliament are all equal and they need an equality of treatment.
	More and more, people who have come into this House do so as I did without any capital behind them or without inherited wealth or the prospect of it on whichever side they sit. Although when I came in there were no allowances whatsoever—only £500 towards the employment of a secretary—I welcome the fact that more young people, and people of all ages, can contemplate coming here knowing that the necessary second home that they must have in London can be honourably and properly provided for. Of course it is right that receipts should be produced. Of course it is right that people should not be prodigal in their expenditure. However, we are talking about expenditure that is within a global limit of £23,000. No one wants the hon. Member for Wolverhampton, South-West (Rob Marris) to sleep in an empty box; of course they do not. Of course he must have furniture in his home.
	I must say to my right hon. Friend the shadow Leader of the House that one inferred from her remarks—I am sure that it was not her intention—that it was not necessary for people to have homes that they could furnish and from which they could establish a base in London and do their job properly in this House. One of the worst developments over the years that I have been here has been that Members have spent too much time away from this House, which is one reason why I was so opposed to many of the changes to our hours. Thursday is now a non-day here. In the old days, it was the busiest day of the parliamentary week. I often quote Duncan Sandys. He had a London constituency but said, "I am the Member for Streatham at Westminster and not the Member for Westminster in Streatham." If one is going to be a proper Member of Parliament, looking after one's constituents and constituency when the House is not sitting, but being here to represent them when it is, one does indeed need to have a London base. It is right that there should be proper provision for it.

Theresa May: I simply want to clarify that I did not imply, and did not intend to imply, that the vast majority of Members do not need a second home in London, but there are ways of providing for that which do not necessarily require the purchase of furniture and household goods.

Patrick Cormack: And there are equally honourable and probably economically more sensible ways of doing that. That is the point. I just ask my right hon. Friend to reflect on it.
	I made a promise to the Speaker that I would not be long and I want to finish where I started. We are, I trust, an honourable House. We come here to serve our constituents, not to debate our own emoluments. I hope that we will not be doing it for a very long time to come. However, I hope above all that this is the last occasion—it is the first in my experience—when issues of this nature are debated on a party basis, rather than on a cross-party House basis with a free vote at the end. I intend to exercise my disapproval of not having a free vote in the party as a whole by not voting on the Opposition motion. I trust, however, that at the end of the day, the House will come to a collective decision that will enable us to go forward, holding our heads high and getting on with the job that we really should be doing.

John Spellar: The speech of the hon. Member for South Staffordshire (Sir Patrick Cormack) gave the Opposition deputy Chief Whip palpitations, but I am sure that he will recover from them. That makes a good start to my speech, because I rise in defence of Members generally and especially those on the Opposition Back Benches who will have difficulty defending themselves in the face of this last-minute publicity stunt by their leader's office. It shows considerable disdain for them and is reminiscent of that line from a Tory grandee about Michael Heseltine when he was dismissively referred to as someone who bought his own furniture. Obviously, that disdain for those who buy their own furniture is still around in the upper echelons of the Conservative party, but not even in the Conservative party does everyone come from a family of stockbrokers and merchant bankers and, almost by definition, not all of them are able to marry into the Astor family.
	The Opposition motion also seems to be a heavy smokescreen to obscure some of the internal divisions inside the Conservative party. We all know from the media that the Tory leadership is in trouble with its MEPs, not only on expenses, but also because of considerable policy differences. It may be that it is trying to create confusion, but it is our duty to clear that away and get a bit of clarity.
	Contrary to the assertion by the right hon. Member for Maidenhead (Mrs. May), it is not the Tories who have brought transparency to the expenses of Tory MPs; it is  The Sun and other newspapers. Frankly, the Tories should not be blaming the system for that; they should be blaming their own people. Perhaps they should take a leaf out of the book of the leader of their party who, only this week, I think, made a speech in which he said that we should not blame the system and society and that people should take responsibility for their own actions. Perhaps that doctrine should be applied on the Conservative side of the House at the moment.
	I also welcome the fact that the Conservatives and Liberal Democrats have caught up with Labour MEPs on this issue. However, I query the hon. Member for North Southwark and Bermondsey (Simon Hughes)—I can now put the question that I wanted to ask him when he would not take my intervention—on whether the Liberal Democrat proposals will be retrospective and also include Members of this House who were previously MEPs, and whether they will be publishing their expenses for that period.

Andrew Robathan: I am not sure that the right hon. Gentleman is going to get a response to that question, so perhaps I can ask him one. Will he point me to where I can find the statement of Labour MEP expenses on the internet or wherever else? I have looked quite hard and I have not discovered that they have been published.

John Spellar: I will certainly refer the hon. Gentleman to the Leader of the House, who has had discussions with the leader of the Labour MEPs. I am sure that my right hon. and learned Friend will be more than pleased to provide him with the information.
	As the amendment makes clear, Labour MEPs decided some years ago to adopt open and transparent procedures. We must ask why the Tories did not do the same. There is, of course, a possibility, which we have to consider, that this is not so much about expenses, but about politics—in particular, given a list system, a desire to purge the Conservative MEPs of those who might be causing difficulties for the party—

Mr. Deputy Speaker: Order. I am loth to intervene on the right hon. Gentleman, but he should perhaps come back a bit more to the motion before the House.

John Spellar: Thank you for that, Mr. Deputy Speaker. But if there are, as we know, attempts to say that those who do not fill in the expenses forms as required by the party leader on a retrospective basis might be removed from the list of prospective Members of the European Parliament standing in the next election, it is possible to query whether that is just to do with their expenses or whether it is an attempt to purge the list of MEPs who might be an obstacle to the Conservative leader's rather crazy idea of tying them up with a group of very dodgy fringe parties in Europe, which would reveal it as a rather nasty party indeed.
	There is also a questionable motivation on MPs' expenses. Again, nearly all the complaints about breaching the rules relate to Tory MPs. I stress that that does not apply to the vast majority of Tory Members, who rightly claim what they are entitled to and who are being unfairly tarnished by those who behave badly. I also note the way in which the issue has been stirred up by Conservative Front Benchers in—I presume—a vain attempt to curry favour with the BBC, an organisation that is remarkably reticent about its own salaries and expenses. Who knows whether that will become more of an issue later in the year?

Lynne Jones: I do not know about the John Lewis list, but the last time I made an expenses claim was when I had to replace my iron and bought a new one for £15.99 from Harry Tuffins. If the media are really concerned about Members' claims, perhaps they should look at the claims of those who have been Members for many years and are still claiming the maximum allowances. When I entered the House in 1992, the mortgage on the first and only flat that I bought was £250 a month, or £3,000 a year. What about Members who are able to pay huge mortgages, some of whom refinance their mortgages by letting out their original properties, buying more expensive ones and claiming the maximum allowances? They do not even have to worry about the John Lewis list.

John Spellar: My hon. Friend is right: those of us who entered the House some time ago tend to make lower claims. In fact, I note that mine are substantially lower than hers.
	What is actually going on inside the Conservative party? A good rule of thumb, which applies to all parties, is that leaks normally come from one's own side. They may come from disgruntled staff, as may have been the case in some of the instances that we are discussing, or even from ambitious colleagues. In view of that, I find it slightly surprising that Conservative Front Benchers should wish to table a motion to embarrass their colleagues further, including some of their Front-Bench colleagues. Why, for example, do they want to embarrass the hon. Member for Meriden (Mrs. Spelman), whose case is being considered by a Committee of the House?

Mr. Deputy Speaker: Order. I am now in danger of having to ask the right hon. Gentleman to resume his seat. He is not talking in a way in which any Member on either side of the House would expect the debate to be conducted. I ask him to think very carefully about what I have said.

John Spellar: Thank you, Mr. Deputy Speaker. Is it not slightly odd, however, that—as has already been said a number of times—what is essentially a matter of House business should be raised in Opposition time and thus become a matter of party business, especially given the considerable number of issues raised, quite legitimately, by the Leader of the Opposition at Prime Minister's Question Time?
	Is it not also slightly odd that the motion should have been tabled now, given that there are very good Conservative members of both the Members Estimate Committee—including the right hon. Member for Maidenhead—and the advisory panel? The Conservative leadership will know that the Members Estimate Committee is due to meet on Monday to consider a recommendation from the panel for a tightening of the audit—involving the National Audit Committee—and a rewriting of the green book. Is this a variation of the old Liberal Democrat trick of finding out which streets are to be repaired, issuing a focus leaflet demanding that repairs be made, and claiming the credit afterwards? By definition, both those bodies will have to present their findings to the House in the autumn. What was the rush for the motion?
	The final question that must be asked is "Does this matter?" It is true that the memory of a half-baked motion rather inadequately moved just before the recess will soon fade, although it will undoubtedly revive some doubts in the Opposition ranks about the judgment of the Leader of the Opposition. However, it does not do justice to Members who make reasonable claims arising from the nature of the job. Gone are the days when it was strongly demanded of a Sheffield Member that he visit his constituency at least once a year—although the requirement was waived when he became a Minister.
	Our constituents rightly want to see much more of us than they used to, and to hear from us as well. That is true not only in the United Kingdom but around the world—throughout the Anglo-sphere. The hon. Member for South Staffordshire was wrong in that regard. The balance has changed: although it is right to say that we have considerable parliamentary duties, constituency representation and constituency duties are an increasingly important part of the job. That is the way things are nowadays, and we must face up to it. It means that the great majority of Members must have two residences, and, as we all know and as was pointed out by my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones), the cost has risen considerably. Indeed, the cost to new Members has probably reached the limit. We sensibly decided not to opt for an eastern-Europe-style barracks block for Members of Parliament, on grounds of cost and security quite apart from any other considerations.

Lynne Jones: I recall that, as a new Member, I was out of pocket for the first few years. Is there not a case for a higher allowance for new Members and an attenuated allowance for those who have been here longer?

John Spellar: I think that that proposal should be considered. The Leader of the House spoke of a possible 10 per cent. limit, although I do not know whether the percentage would change according to the initial setting-up expenses. One of the issues that the panel is examining is the considerable up-front cost of setting up an office and a home and what can be done to help with cash flow, particularly just after an election when often people have not been paid. I hope that the panel will look favourably on the idea of giving such help. It must also be borne in mind that we have to live in our second residences for a fairly long period, and it is proper for them to be furnished.
	Another aspect that we should bear in mind is the social change that has taken place in the House. Not only are there many more women here; there are many more younger Members. As I said on, I believe, 3 July, for the first time all three leaders of the main political parties have young families. The composition of the House is very different from its composition when I first came here.
	As we observed earlier this year, school holidays do not always coincide with the holidays of the House. If we want families to be able to spend a reasonable amount of time together, it is appropriate for them also to have a reasonable level of accommodation—not luxurious, but sufficient to enable them to lead a family life. If we do not build that into the system, only those who have inherited or married into money, or have made some money before coming here, will become Members of Parliament. That would be bad not just for individual Members of Parliament—although it would slowly wear away their position—but for democracy. We must be able to draw on the widest possible pool, not just on those who are prepared either to make sacrifices or, even more significantly, to sacrifice their families in order to represent their constituents in the House.
	We need to make that case, even at the cost of the cranky letters and e-mails that we will undoubtedly receive. It is rather a shame that, on a day quite close to the recess, Opposition Front Benchers are not acting on behalf of their own Members, which is why I hope the House will support the Government amendment.

David Maclean: I intend to speak on narrow issues. I do not wish to discuss the MEPs. I am not very concerned about what is claimed by MEPs in either party, or about what they publish; I am more concerned about what they do.
	I apologise to the House for the fact that I will be chairing the Joint Committee on Statutory Instruments at 3.45, and will therefore not be here for the winding-up speeches. I am expecting a rather important statutory instrument on freedom of information, and I think the House would prefer me to be there. Indeed, the House might prefer me to be there now. Lest the media issue any challenge, I should also point out that I am a beneficiary of, in addition to the normal allowances, special help from the House's disablement fund for Members with mobility and other problems. I am leaning against one of the items that it provides at this moment.
	Although I admire the right hon. Member for Warley (Mr. Spellar), I am not going to take the route that he took. I congratulate the hon. Member for Middlesbrough (Sir Stuart Bell). I agree with every single thing he said. Members might think that I would say that as I, too, was one of the MEC 3, who, thankfully, have now been released from the heavy task we were given in January of coming up with fundamental root-and-branch reforms to our allowances. I stand by everything that the three of us—along with the other members, the Leader of the House, the shadow Leader, and with Mr. Speaker as Chairman—proposed as a package. I regret nothing we proposed, and I would not rescind any of it. I do have one regret, however: the timing was wrong. We had orders to do our job on such a tight time scale that the House did not have a chance to see the detail of our proposals and to chew them over and consider them, and we probably did not have the time to reassure colleagues in all parts of the House of the content of practice assurance and what it entailed.
	I therefore agree with the hon. Member for North Durham (Mr. Jones) that many of our recommendations should have appeared as a sort of Green Paper that we could have chewed over. We could then have come back in October with some final recommendations. If we had done that, I am certain the House would have accepted all the recommendations, and the amendment of the right hon. Member for Islwyn (Mr. Touhig) would not have been necessary and would not have been agreed to.
	I will attempt not to make any partisan points today, but I will say that in some ways the Government are now trying to unscramble what we agreed a few weeks ago in order to create a tough, rigorous audit assurance system. We proposed that in recommendations 1 and 2, but we had not spelled out what we meant by practice assurance, and that scared a lot of colleagues, and colleagues also rightly questioned the cost. Given more time, I think we could have come up with more accurate costs, and I hope that it would have been less than £1,500 per person per day around the offices. That argument has now been lost, however, and this matter is now down to the Government and the advisory panel—I wish the right hon. Member for Warley well, as he will have a busy summer rewriting the green book, and the three of us are glad we no longer have that onerous responsibility. It is now up to the Government to make the NAO proposals work.
	My main concern relates to the additional costs allowance and the so-called John Lewis list. I say to the House, with all the authority I can muster as a member of the House of Commons Commission and the MEC, that no MP had ever heard of the John Lewis list before it was forced into the public domain in court. In defence of the Department of Resources—I know it is not popular to defend it—let us ask why it invented it. I have with me a scrappy copy of the John Lewis list, which I have been carrying since January in case I was attacked or questioned on it, and it is internal guidance to the Fees Office staff. It says:
	"Staff are instructed to use the list as a guide when assessing whether purchases are allowable under the green book section 3.14.1—non-allowable expenditure: 'furnishings, including white goods or fittings which are antique, luxury or premium grade'—and...allowable expenditure. Members should avoid purchases which could be seen as extravagant or luxurious."
	The purpose of the John Lewis list was not to help colleagues get better quality white goods or furniture; it was a guide to stop that happening—it was an internal guide to limit the amount. Let me give a hypothetical example. I had to replace my washing machine last year. I could have bought a top-of-the-range machine made by a company such as Bosch for £1,200—although why anyone would pay that much for a washing machine is beyond me—and then have gone to the Fees Office, and it would have said, "Terribly sorry, David, but you're charging far too much." It needed an internal guideline. I think the guideline in the list for a washing machine is about £395, which is quite low.

David Clelland: I am sure that the right hon. Gentleman is aware that John Lewis adopts the mantra, "Never knowingly undersold". Therefore, does it not provide a perfectly reasonable measure of Members' expenditure?

David Maclean: Yes, it is a good mantra, and that is the point. What would happen if we were to move to any other list? I know that people joke about the IKEA list; it will have some good furnishings, but it will not have any electrical goods. Others have proposed an Argos list. The point is that there will still end up being a list of some sort—perhaps a National Audit Office list.

Kevan Jones: Does the right hon. Gentleman agree that what the majority of Members want are clear rules that they can understand and then implement? Is not one of the biggest problems the old Fees Office, because inconsistent advice was given to both Members and their staff? We learned a few weeks ago that MPs were employing staff who had not lodged contracts with the Fees Office, but I and others had always been told that people could not get paid until that had been done.

David Maclean: Yes, that is true; there has been inconsistent advice, and that was one of the purposes of the practice audit teams that we wanted to set up. They would go round to help colleagues get things right. I say to Members of all parties that if we do not have that and instead have only a toughened up NAO going round, I suspect that all it will be able to do is report on our errors—our genuine errors and mistakes. When that is in the public domain, those genuine errors and mistakes will be regarded as crimes against humanity. Our internal practice assurance teams were able to go round and say, "David, you put it in the wrong column," or as the Fees Office informed me in a note two weeks ago, "You've transposed the figures 3 and 5; it should be 53 instead of 35." A tiny amount of expenditure was involved, but I had made a mistake in transcribing some figures on to my form.
	When the NAO finds such mistakes, they will be reported as, "MP makes a mistake", and that will be referred to the Standards and Privileges Committee the next day. We wanted something intermediary to hold our hands and help us get things right. There are 650 Members claiming the different allowances at different times of the year in different ways. We have our interpretation and, over the years, the interpretation of the Fees Office has changed, too. A Member said that when he arrived here in 1992 he went to the Fees Office, where someone said, "Oh, why haven't you got a mortgage, old boy? You can claim for it." The rules have been tightened up only when various things were exposed as wrong, or when genuine mistakes were made, or we had reports from the Standards and Privileges Committee saying, "This was an abuse." We have been trying as a House to tighten these rules, not on a systematic basis but as problems occurred. Of course, in those circumstances, advice has sometimes been inconsistent.

Lynne Jones: However, is it not still within the rules for Members to acquire new mortgages and let out the first home they claimed for, and then claim a larger mortgage? Also, can they not at a later date transfer what was a second home into a primary home and thereby make huge capital gains on the basis of taxpayer contributions, while nothing is done about that? That represents a huge amount of profiteering. The John Lewis list and new Members having to set up their homes pales into insignificance in comparison with such abuses.

David Maclean: If the hon. Lady has evidence of such abuses, they should be recorded. Such allegations were made by external people. I think Sir Christopher Kelly was worried about that. We said point the finger at someone who has got a third home somewhere that is a holiday home and who is claiming additional costs on that. We went into the mortgage issue very carefully. Let me say with all the authority I can muster that the cheapest and best deal for the taxpayer and for Parliament is for colleagues who are elected to buy a property and have a mortgage on it and get the mortgage interest paid by this House. That is a good bargain for the taxpayer at the end of the day.

Linda Gilroy: Will the right hon. Gentleman give way?

David Maclean: I am running out of time and I do not want to be bogged down on this issue.
	We looked at the costs of renting property. If a Member is in this House for a few years—let us say 10, 12 or 15—and they rent a property, the rental costs are likely to increase every single year. There is a higher cost to Parliament in paying for rented properties than in paying mortgage interest costs. We are not here to abolish rented property or mortgage interest. We looked into the matter very carefully and we thought it was perfectly legitimate to let that be claimed. However, as I have said, we came up with a package. There is, of course, a benefit to a Member if they are lucky in the housing market, but I believe that some Members who left this House in 1997 were out of pocket, as property prices go down as well as up—as we are also discovering at present. However, there can be a benefit to a Member in owning their own property; there is the comfort and reassurance of ownership. In those circumstances, we thought we should not allow the additional benefit of £1,600 per year on average, which is the amount claimed on white goods in the so-called John Lewis list.
	I take on board the point that there is a higher start-up cost for new Members. What would happen if we were to go down the route proposed in the Government amendment? I am not totally opposed to it, although I will, of course, support the Conservative Chief Whip as I like the part in his motion about white goods. If that is lost, I wish the Government well in the procedures that are adopted. I say to them that if the National Audit Office is to be given this task, it will have to invent a list of the reasonable reimbursement costs for furniture and other household goods. The cap might be at 10 per cent., but our studies suggest that that is too high for continuing Members—we do not need £2,400 per annum to replace the essential items in our property—and too low for starting Members. I leave that as a problem for the NAO and the panel chaired by the right hon. Member for Warley to sort out.
	The other point that needs to be made robustly is that the overall amount of the ACA is about right. Before anyone in the media or elsewhere starts whingeing about it, the Senior Salaries Review Body examined it and concluded that about £24,000 was the essential sum necessary to maintain another residence in London. I hope that the Committee will examine this nonsense of having one property described as the main home and the other as the second home. It will probably have to do so to sort out the amendment tabled by the hon. Member for Bassetlaw (John Mann), which is probably utterly unenforceable—that is a problem for others to sort out.
	When I entered Parliament as a new Member, my home in the constituency was my main home and my little London flat was my second home. When I became a Minister, things were automatically transferred without my having any say; I was told that my home in the constituency had become my second home and that London was deemed to be my main residence. When I subsequently entered Opposition in 1997, it all changed back, and it changed again when I was made Opposition Chief Whip. This is nonsense, and I believe that my hon. Friend the Member for New Forest, East (Dr. Lewis) is working on a paper, which he will submit to the panel chaired by the right hon. Member for Warley, on how we designate our properties.
	Three or four years ago, when I was Opposition Chief Whip, I calculated that in one year I had spent exactly 170 days here in Westminster, 170 in the constituency and 25 on holiday. In such circumstances, MPs do not have a main home and a second home; as Members of Parliament, we are required to have a firm base in London. We are not travelling salesmen, who can live in a different hotel room—a different Travelodge—each week, so we need that firm base. If we have bought a property, it needs to be furnished, and if we are to furnish our property and to keep some form of list, we must make a robust defence of the arrangements. I robustly defend the right of Members who are buying a property to furnish it and to have the proper kit so that they are not sleeping on the floor or on cardboard boxes.
	One may ask why I recommended the abolition of the John Lewis list. We thought that, taken in the round, robustly keeping mortgages and defending the per diem rate of £30 and the £4,200 of the ACA was a package of measures that fairly compensated colleagues for the costs that they had incurred in maintaining a base in London. I will support the list's abolition, but if it is not to be abolished, I wish the Government, the right hon. Member for Warley and the NAO success in coming up with a definition of reasonable property and the reasonable kit to have that will persuade our friends and others in the media that we do not have our noses in the trough. We do not have our noses in the trough, but we must ensure that we defend our arrangements properly in future.

John Mann: I thank all hon. Members for the unanimous support for my amendment that was successfully passed over a week ago. One or two hon. Members seem to be a little confused about what they, quite rightly, passed, but one of its consequences relates to property accumulation—this answers one of the points raised by my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones). One used to be able to claim the maximum allowances and, over time, build up a larger and larger property while claiming the allowances, but that is no longer possible. For that reason alone, a sensible decision was made, and I congratulate the House on its wisdom. I trust that none of the three Front-Bench teams will seek at any stage to unravel and backtrack on the House's wise decision on that point.
	It is important to break down the three separate elements that confuse this debate, not only in the public's eye but here. The first issue is malpractice. Although it is rare I have occasionally commented on it, and when I have done so, I have suggested that where there appears to have been malpractice, the person involved should repay the money to the taxpayer. That seems to me to be a sensible approach, although nobody has yet followed my suggestion. That is their choice, although it may not be a wise one.

Greg Mulholland: rose—

John Mann: I shall give way in a minute. The second issue, which, of those I have raised in the past year, is the one that I have majored on, is party political advantage. I shall cite the simplest example—the use of the dining facilities for party political advantage. Thanks to the Committee on Standards and Privileges, and to my delight, that is now debarred. It is no longer possible, as the annual report of the Sevenoaks Conservative Association, in respect of which a registration has just been made with the Electoral Commission, makes clear. It states that the patrons' club has been terminated, saying:
	"The termination of the facility for dinners at Westminster removed the main attraction for members".
	That is highly appropriate; Parliament has moved on and has stopped the misusing of the facilities for party political advantage. It is important that we continue this approach. I have made a number of other challenges in relation to potential party political advantage, and I will continue to do so where there appears to be any such misuse of the remit of political office
	The third issue, which I particularly wish to discuss this afternoon, relates to the systems. This may come as a surprise to some on the Opposition Benches, but I have refused on a recurrent basis over recent months to comment on the so-called irregularities, usually of Opposition MPs, when I have been asked to do so, usually by the media. In these cases, what the individual has done, in essence, is to apply Parliament's systems. I shall cite no cases, because it would, by definition, be invidious for me to do so, but the issue is not the action of the individual, who has acted within the system—the issue is whether the system is right. That is where there remains a lack of realism not only within this House, but within the parties in the House.
	The systems are poor, they are not transparent and they leave each and every one of us, myself included, open to attacks by our constituents, by the media, by mischievous opponents and so on, precisely because they do not have the robustness or the transparency that they require. I have tried to comprehend what the Government are putting forward today, and I hope that they are not in any way backtracking from the crucial principle that the general public have a right to know what we do, what we spend and how we spend it. If they wish to criticise me for anything that I have done in terms of my expenditure, they are free to do so and I will defend myself robustly. I may have a different view from theirs on what is and is not appropriate, but as their elected representative, I do not have a right to hide this information away.
	Strangely, in the years for which I have put this information on my website, nobody seems to have been particularly bothered about it. However, people are bothered about their right to know and about the rights of journalists to investigate. I hear many criticisms of journalists and the media in this debate, but I would go in the other direction: we could do with more investigative journalism in our newspapers, because it is a skill that seems to have died a death in this country. Parliament must have systems that are sufficiently robust and defendable, and absolutely transparent, so that we can feel comfortable.
	Our situations will vary. Frankly, I do not care whether people buy a property or not. That is a risk that they take, but they should be open about it. Situations will vary, depending on rental agreements. I read the official Opposition's proposals with some amusement. In essence, if as a renting MP one had an unfurnished flat but now cannot get one, one has to go back to the same landlord or landlady and say, "Well, I'll have to have a furnished flat." The rent will go up in order to provide that furnished flat, so the taxpayer will not necessarily get increased value for money. The different arrangements, which are obscure, mean that some things are more than average and others are less than average. Because I rent a room rather than a flat, for six years I did not have cooking facilities as part of the rental agreement. That meant that the rent was lower, but the situation was different.
	The issue is that the information is out there. If hon. Members want to look at my website—I recommend it—they will see that all that information is there among the campaigning issues. I am sure that it has been scoured through by Opposition researchers over the months—

Daniel Kawczynski: They have better things to do.

John Mann: The hon. Gentleman says that they have better things to do, but there is the issue of party political advantage. One shameful thing during this episode has been the attempts by Conservative central office, when someone has had the effrontery to suggest that certain MPs should repay money, to give false briefings to the press to suggest things that are not there. That has been tried in my case over the past three months on three occasions. None of those attempts has got anywhere, because the information is false. The first was so farcical that the individual concerned had to apologise. I was also able to point out that he was in criminal breach of the Electoral Commission regulations when it came to his own visits, and I discreetly and politely corrected him on that.

Daniel Kawczynski: What has that got to do with the motion?

John Mann: It is absolutely to do with the Conservative Front-Bench motion.
	Let me complete what I was saying. The second attempt happened when the great mystery of an unknown donation was revealed to the press. The donation was from a Mr. and Mrs. J. Mann MP to the Bassetlaw constituency, and I was therefore not required to register it as a gift to me. The third attempt was the most disgraceful, and came from the miners' compensation scandal. I have a specific request for those on the Opposition Front Bench. The papers that they have attempted to circulate to the media should be handed over—one decent and honourable Opposition Member has already done so—to the Serious Fraud Office, as the matter is related to an ongoing investigation into miners' compensation.
	The fact that certain people in Conservative central office have chosen to try to circulate such things to the media and have tried to suggest a major scandal with faked documents put out by one of the parties who are being investigated by the Serious Fraud Office is somewhat out of order. I politely request that those documents should be provided to the Serious Fraud Office. I will be happy to provide the Opposition Whips, or the Opposition Chief Whip, who is not in his seat, with the details of where to send those papers. I know that they are in their possession, because one hon. Member has chosen to give me said papers, which were given to him.

Lynne Jones: Does my hon. Friend agree that it is better for Members to be required to submit receipts for genuine purchases than to be able to claim £30 a day for which no receipts are required? As for investigative journalism, would it not be better for the media to investigate Members who have been here for many years and are still claiming the maximum because they have remortgaged their properties?

John Mann: All Members, old and new, are equally vulnerable under the existing systems. There is a premise in the debate with which I disagree, although I am sure that I am in a rather small minority in doing so—possibly a minority of one. The basic tenet of the debate, when it is discussed in private, is that MPs are not paid enough. People say to me, "The allowances are your pension, and so on. That's why we have those things." That has been said to me on countless occasions. If people feel that MPs are not paid enough, the way to deal with that is to propose that MPs should be paid a lot more. I would disagree. I think that MPs are reasonably and fairly paid, and the comparators used in other debates are rather spurious. Comparisons in my constituency would put me in a rather privileged position, so I do not feel a great need to change the situation. However, if the whole expenses system is meant in some way to compensate for a perceived underpayment, MPs should be prepared to say, "Pay us more, and we'll spend the money on whatever we want, but we'll deal with the taxman just as everyone else does." That would be a way of getting the general public off our back, because they are rightly on it at the moment.

Judy Mallaber: Will my hon. Friend rest assured that a number of MPs feel that we are perfectly well paid? On a day when low-paid workers who are paid £12,000, £13,000 or £14,000 are taking action, it is time to put it on the record that we are very well paid indeed.

John Mann: I agree with my hon. Friend. I am concerned about the approaches of the different Front Benchers, who are all attempting to gain party political advantage with the resolutions that they have tabled. That is inappropriate today. The original motion should not have been proposed. It would directly benefit those who claim the maximum, who have bought property and who are paying their mortgage interest on it. We should be open and honest about the fact that that is what the motion does. That is one way in which people can claim expenses, but it is not the only way. It is not the only system. It might not be the best and most affordable system, but that honesty is needed. Three of those in whose name the motion is tabled, including the hon. Member for North-West Cambridgeshire (Mr. Vara), who is on the Front Bench at the moment, would appear from the Register of Members' Interests to have a multitude of properties.
	I would not challenge the right of people with a multitude of properties to be able to claim whatever allowances for housing are available, along with everyone else, but I am damned sure that a number of my constituents would feel that that was inappropriate. That is the danger of phrasing such a resolution in such a way. We need a little breathing space so that we can get some effective systems in place that mean that everything is out in the open. They should be clear, easy and not over-generous. If we do that, the faith of the public in what we are doing will increase and they will concentrate far more on the political differences rather than on the perception of the increased wealth that we gain from being here.

Several hon. Members: rose —

Madam Deputy Speaker: Order. Mr. Speaker has imposed a 12-minute limit, but, in view of the number of Members who still hope to catch my eye, it might be helpful if Members considered reducing their comments even further.

Peter Atkinson: I shall try to be far briefer than 12 minutes.
	It is interesting to follow the hon. Member for Bassetlaw (John Mann). The only point on which I agreed with him was his last point. I totally disagree that today's debate is somehow improper; in that, I expect that I disagree with some of my Opposition colleagues. It is perfectly right that we should use an Opposition day to highlight the matter and to show the public that we take the debacle that happened on 3 July seriously, and that we want to do something about it before we go away for the recess.
	I get slightly tired of the idea—people get rather pompous and high-minded about this—that our expenses are a matter for the House and should not be a political matter. Of course they are political. Anything we do in the House is political, and trying to pretend that there are somehow two levels of debate is a complete waste of time. If what I read in the newspapers is true, on 3 July, which was a free-vote day for us and was meant to be a non-political day, there was an attempt to make some sort of tawdry deal in that Labour Back Benchers would back the payroll and vote against increased pay on the basis that the John Lewis list would survive. If that is true—I can only report what I read, and these things are rather difficult to prove—that shows how much the politics interfere with such debates.

Lynne Jones: Is there not every difference between doing something, and doing what is right? I recommend International Stock of Kings Heath as a very cheap source of electrical appliances, but I cannot see that it is better to replace the so-called John Lewis list with a £30-a-day allowance for which no receipts are required. Doing something is not the same as doing what is right.

Peter Atkinson: I agree, in the sense that I did not agree with the £30 daily allowance. That is why I did not vote for it. However, I did not vote against it, and to some extent I regret that, as it might have moved the debate on had I done so.
	The motion has one great advantage—its clarity. It proposes a clear way forward and so gives us a very good basis for debate. I may not have understood everything that the hon. Member for Bassetlaw said—he lost me during part of his speech, as I am not up to date with his justifiable campaign on the miners' compensation scheme—but I was concerned that he was trying to close loopholes. The difficulty with all allowances is that they do not take account of the fact that everyone's different circumstances require them to live in slightly different ways.
	Consequently, the motion is right because it is simple and gives a sense of transparency. The electorate can judge whether individual Members of Parliament are behaving properly only if they can see what we claim and then form their own judgment. It is impossible to write a rule book that covers all eventualities and all the circumstances that MPs face.
	I want to make another point. Some colleagues on this side of the House as well as on the other may disagree with me, but I believe that we have an ostrich-like view of what is going on here. This issue has caused me more embarrassment and my constituents more annoyance than anything has during the many years for which I have been in the House. The public feel very strongly about this matter, especially when they read about the John Lewis list.
	I understand exactly the basis of the John Lewis list, and my right hon. Friend the Member for Penrith and The Border (David Maclean) was right to say that it has been a useful guide. However, it has become a sort of totem that has registered with the public. People think that we are all buying £2,000 German washing machines when our washing machines break down.
	These matters are important, and we did need to deal with them today. I accept what the Leader of the House said earlier—that the document that came out today was simply a coincidence, and that the work had been in progress before. That is good. I hope that we do not lose the vote on our motion today, but I suspect that we will. However, even if we do lose the vote, at least the Government will be able to move on in a positive way to resolve the issue. I think that it needs to be resolved as a matter of considerable urgency.
	I shall end with a few brief remarks about pay and allowances in this House. This is a question that we tend to duck. It is all right to say that public sector workers are out on strike, but we need a level of pay in this House that will encourage ordinary men and women who carry the normal burdens of life to become Members of Parliament. We cannot have only wealthy people here. The right hon. Member for Warley (Mr. Spellar) is a rather nice, old-fashioned class warrior whom I quite like, but it was nonsense for him to suggest that all Conservative Members are rich and all Labour Members poor. I seem to remember that new Labour was founded by an awful lot of wealthy millionaire socialists.

John Spellar: I think that the hon. Gentleman slightly misunderstood me. I said that many people are in exactly the same position as the one that he has described on the Conservative Benches—that is, that Back-Bench Members are being let down by their Front-Bench Members, who treat them with considerable disdain and do not recognise that proper expenses have to be provided. I knew that Conservative Members would find it difficult to speak on their own behalf, so I sought to do it for them.

Peter Atkinson: I do not think that the right hon. Gentleman needs to speak on behalf of Opposition Members, but we should lay the myth that all Labour Members are as poor as church mice. They clearly are not.
	My real point is that we need to have proper pay and allowances in this House. We have consistently asked independent people to look at our pay and allowances. When they come forward with recommendations, we are told by Cabinet Ministers—who, of course, get a bit more money than the ordinary Back Bencher—that we should forgo any increase because we would otherwise be setting a bad example.
	I voted for the compromise proposal that we should instigate the Baker review, but at a delayed date. That was the right thing to do, but in case anyone thinks that I voted out of self-interest, I should add that I shall not be in the next Parliament, and so will not benefit in any way. However, we need to address this problem.
	As was mentioned earlier, when I first arrived in the House new Members were given easy advice by the Fees Office, as it was then known. We were told that it didn't really matter how we spent the money, although the allowances were of course much smaller in those days. When I first arrived, new Members were asked to divide the entire annual allowance into 12 portions and to put in a claim every month. That arrangement suited both the Fees Office and us, and there was no problem. Most of the money went on rent, council tax or utility bills, and it did not allow anyone to rush out and buy expensive German washing machines.
	The problem arose in 2001, when we voted to increase our allowances from about £13,000 to just under £20,000. That changed the name of the game. In retrospect, we should have re-examined the circumstances of the allowance, because the decision opened up the opportunity for vastly more discretionary payments. In some way, that was the downfall of the allowance.
	I hope that the Opposition motion will be carried today. As I said earlier, it has the advantage of simplicity. The danger is that we do not realise how far behind the pace of public opinion we are on this issue. If we are not seen to be doing something about it urgently, many of us will have a fairly uncomfortable summer recess.

Kevan Jones: May I say how pleased I am to follow the hon. Member for Hexham (Mr. Atkinson)? I agree with him that this is a political issue. I do not agree with the hon. Member for South Staffordshire (Sir Patrick Cormack), who said in a rather pompous way that these things are somehow above party politics. The motion before us, tabled on behalf of the Conservative party, is very party political. I must say that I give the Opposition 10 out of 10 for front, as I do not think the Conservative party has any moral authority to lecture people about probity in public life.
	What the right hon. Member for Witney (Mr. Cameron) is trying to do is quite clear: he is trying to throw enough smoke in the air to capture the mood of public dislike for politicians because he thinks that that will get him some party political advantage. However, I remind the House that the real rotten problem lies with the Conservative party. I admit I am talking about a minority in that party, but I should like to remind the House of some of the recent scandals.
	We all know about the hon. Member for Old Bexley and Sidcup (Derek Conway). We also know—my hon. Friend the Member for Bassetlaw (John Mann) mentioned it—about the widespread abuse by Conservative Members of this House's dining facilities for raising party funds. In 2006, the right hon. Member for Witney was himself criticised for using his parliamentary office for party fundraising. There was also the report a few weeks ago about the hon. Members for Congleton (Ann Winterton) and for Macclesfield (Sir Nicholas Winterton).
	In addition, my hon. Friend the hon. Member for Bassetlaw and I have highlighted the web of untransparent systems set up to hide who was funding those on the Conservative Front Bench. Without that complaint and the report from the Standards and Privileges Committee, we would still not know where those funds came from.
	People may ask whether these problems are new in this Parliament, but they are not. We all remember the honourable—although perhaps he was not so honourable—Jonathan Sayeed, who charged people for tours of this place. In the end, he was asked to pay back £16,000 improperly—

Madam Deputy Speaker: Order. I think the hon. Member has made his point. Perhaps he will now address his remarks to the motion.

Kevan Jones: I will, and I shall now refer to the changes to the additional costs allowance. They were introduced because the former Conservative Member Michael Trend was abusing the system by claiming an allowance when he did not have a second home.
	Such examples are relevant, because press reports give the impression that we can still do that, and the changes referred to by the right hon. Member for Penrith and The Border (David Maclean) were brought in as a direct result of what happened.
	What have all the people I mentioned got in common? They are all Conservatives. The Conservative party cannot lecture others, and not try to sort out its own house. We should also consider the scandals exposed recently in Europe; we are talking not about small amounts of money but about half or three quarters of a million pounds claimed by the MEPs in question.
	As has already been explained, the Conservative party is trying to claim the moral high ground by saying it will bring about openness and transparency through the publication of MEPs' expenses. My party has been doing that for the past eight years. When the shadow Leader of the House's party publishes those expenses, I challenge her to ensure that the figures go back eight years; it would be interesting to see what Conservative Members have been up to over that period.
	Most right hon. and hon. Members want a clear system for expenses. They want what they have claimed to be well understood. As my hon. Friend the Member for Bassetlaw said, it would then be down to the public to judge Members on what they have claimed and how they have used their expenses. This is not a criticism of any individual or set of individuals; the problem is that the system has grown up over time, and that has led to a lot of inconsistencies. I am not criticising individuals in the Fees Office, but different advice is given. Sometimes, the office is given some very difficult jobs to do.
	At the end of the day, we have to recognise that if Members need a second home, they need an allowance to cover that. That should not be a generous allowance; it should be an allowance to cover the cost. Most hon. Members would be quite happy to have the amount that they spend published, but they also want to make sure that they understand the rules, so that they cannot inadvertently fall foul of them.
	Much has been said about the Members Estimate Committee report. I voted against what it said, and I shall make it clear why I did so. I make no criticism of the individuals involved; they had a very difficult job to do, and with hindsight, if they had published a Green Paper and put in place a consultation, I think we could have come to an agreement and put forward a suggestion. Now that the report has been voted down, it has a sainted, Ark-of-the-Covenant feel to it, but the idea that it would solve all the problems is absolute nonsense. I do not accept that giving me, or any other Member of Parliament, £4,200 a year without any receipts is more transparent than keeping the system as it is, or having more rigorous auditing and publishing the results of that audit.
	I am sorry, but I do not think that the hon. Member for North Southwark and Bermondsey (Simon Hughes) has read the report in detail; if he has, he has certainly not understood it. I am all for the idea of assurance, and people going into offices to give advice, but the idea that he put forward today, with which I agree, is that the public money that Members spend should be rigorously audited. I have no problem with that; if those audit reports are made public, fine. That would give the public the assurance that they want. If there were clear rules laid down, Members could be assured that what they were claiming was correct.
	It is all very well for people to say that there is widespread abuse, as the shadow Leader of the House did earlier. I hear that all the time. I heard the hon. Member for Cities of London and Westminster (Mr. Field) accuse Labour MPs of doing various things. I am sorry, but as the right hon. Member for Penrith and The Border said, if people are abusing the system, they need to be reported, and the system should deal with them. We cannot allow the current situation to continue. I shall break the habit of a lifetime and agree with the hon. Member for North Southwark and Bermondsey on one point: what we did a few weeks ago left us in limbo, and we could not leave things as they are.
	The proposals that have been put forward are correct. Rigorous audit has to be put in place, and the rules for Members of Parliament have to be clear. People who try to make a party political point of the issue, as the Conservative Front Benchers are trying to do today—

Ann Widdecombe: What about the first part of your speech?

Kevan Jones: I was happy to say what I did, because I was responding to the cynicism shown by Conservative Front Benchers, who have used the debate for party political advantage. Like other Labour Members, I should like to keep reminding the public about where the rotten apples in this House have been in the past few years. If we have a clear system, and a clear audit process, and information is published, which is what people rightly want, we could get some credibility back.
	We cannot get into a situation in which hon. Members are told that there are no allowances for second homes, because the result would be that the only people who could afford to come to the House would be those with independent wealth. I am not making a party political point; I refer to what the hon. Member for St. Albans (Anne Main) said in the  St. Albans & Harpenden Review, of which I am an avid reader. She summed up the issue quite well:
	"But unless this system is radically overhauled we run the risk that MPs will need to be independently wealthy, or part time successful business people who can 'afford' to part fund their political career by paying for accommodation in London and or accommodation in the constituencies they represent.'
	I agree totally with that. If we do not have a proper system, MPs will be self-selecting. The only people who would get to the Commons would be those who could afford to, and that would be wrong.

Ann Widdecombe: First, may I apologise for the fact that I was not present for the speech of the Leader of the House, which followed that of my right hon. Friend the Member for Maidenhead (Mrs. May)? May I also associate myself with the remarks made by several long-serving Members of the House and say I regret very much that the subject should have been raised in a political context? We had a debate on this subject, and Members on both sides of the House had free votes on it, not long ago. It has always been a matter of House business, rather than party business. Both Front Benches remind me of those Governments who hold referendums, and when their citizens give them an answer they do not like, hold them again. We should have faced the fact that the House made clear its view on the so-called John Lewis list, and we should have found ways of making it transparent, rather than trying to abolish it altogether.
	The contributions made by Members on both sides of the House today have been largely conditioned by the mischievous and malicious onslaught of the media and the public prints, not just over the past few weeks but over the past few months. Our response to that should not be to crawl on our bellies, but robustly to defend what is right. Yes, it is right that we should have better reporting and more transparency, but it is not right that we should make it impossible for hon. Members to carry out their duties.
	The answer that my right hon. Friend the Member for Maidenhead made to my intervention threw up a very interesting question, according to my interpretation of it, at any rate. Her response seemed to suggest that if one is wealthy enough to equip and furnish a second home, one should be able to buy that second home with the aid of state allowances, but if one is not wealthy enough to do that, one must take a furnished, rented place, and therefore get no advantage. It is a rather strange proposition that there should be two tiers of Members in this House, according to whether they can equip and furnish their own home. We should rather be firm, and say that Members do require a second home. As the right hon. Member for Warley (Mr. Spellar) amusingly said, we do not go to our constituencies only once a year now. Unless our constituencies are in London, it is still very difficult, on Monday and Tuesday nights, to get home, even for those whose constituency is in the home counties, as mine is. It is therefore quite right that we should have a second home.
	When I first came to the House, the allowances were somewhat less generous. In my first year of owning a second home—my constituency cottage—I had a box in which I kept my hairdryer, kettle, toaster and sundry other things. That box went in the car and it went between my homes. I could not put a fridge or an oven in the box, or a bed, let alone several beds for a family. I happen not to have had a family, so at least I did not have to face that problem. It is ludicrous to suggest that most people who come to the House, having had an ordinary professional salary or less, can afford to equip and furnish a second home from scratch.
	I do not speak from self-interest because I never did purchase a washing machine on the allowances.

Kevan Jones: You did not need to.

Ann Widdecombe: That is right; I did not need to. That was because I had a very good friend who was not then in the House, but who is now my hon. Friend the Member for New Forest, East (Dr. Lewis), and he had a spare washing machine, which we put in an estate car and took to my cottage. It lasted for the whole 18 years that I had that cottage, and every year thereafter, in recognition of that benefit, I bought my hon. Friend dinner, and I did not charge the dinner to the allowances. So I never had to buy a washing machine.
	That may be a frivolous story, but it is ludicrous to suppose that a Member of Parliament with three or four children can somehow wash and rinse all the washing by hand and run it through a mangle. Such a person needs a washing machine. It is not a luxury. I never had a television. I do not like television, so I never had one in my second home, and I never asked the state to provide one for me. I went 18 years televisionless in my second home, but I can just imagine the response of a Member's teenage children if he said, "By the way, throughout the summer there won't be any television." Therefore, it really does make sense to allow people to get everyday items that one would expect to find in a reasonable home, and if one can do that, someone somewhere has to decide whether an item is reasonable or whether the state and taxpayer have been taken for a ride. That was how the John Lewis list came into being. Anyone would think it was a wedding list.
	Moreover, the press do not publish the rules. The rules say that one cannot whistle up a £10,000 kitchen from John Lewis, or a £5,000 bathroom. If a kitchen or bathroom is replaced, the rules say very clearly that those costs must be divided between genuine replacement and betterment, and the betterment element must be paid for by the Member. But out there, egged on by the press and by the silly, crawling, gutless response of the House, everybody believes that these things can be whistled up with no rules, restraints or accountability. We should have had the guts to defend ourselves, just as we should have the guts to do so when the press talk about our lavish perks and include our secretaries. There have been some hon. Members for whom their secretary has been a perk, but precious few of them. Such is the view out there that Adam Boulton, who is supposed to be politically wise, actually stated on his programme as though it were a matter of fact that our secretarial allowances are paid directly into our bank accounts. That comes from an experienced political commentator—

Chris Bryant: Who is paid thousands for his suits.

Ann Widdecombe: Who I expect is paid thousands for his suits, although I am not sure. But whether he is paid thousands for his suits or not, he wanted to portray the worst possible picture, and it is false. I, like most hon. Members, do not benefit from one penny of my secretary's or researcher's salaries, or from one penny of what goes on computers, stationery and postage. We do not benefit, and to have that portrayed as a perk is ridiculous.
	If there is one thing that we should have done it is to abolish the word "allowance" and to substitute the word "reimbursement", and to have that which is centrally provided not counted as our personal allowances.

Lynne Jones: The right hon. Lady is absolutely right to say that Members do not benefit from the salaries received by their staff; indeed, many of us have at some time in our political careers actually contributed to those salaries when the allowance was inadequate to provide the staff necessary to fulfil our duties.

Ann Widdecombe: The hon. Lady is absolutely right. I spent the first seven or eight years of my time in the House subsidising a range of allowances. She is absolutely right and we should point that out.
	We are always told that we have gold-plated pensions, but the average pension in payment to former Members is £8,000. Those of us who have managed to clock up the whole sum, as I will have done when I leave, have done so by bringing in pension contributions from former schemes. I came in from the public sector, but many hon. Members have come in from the private sector, so the taxpayer has not been responsible for those contributions. We should have the guts to stand up for ourselves, to make these things clear, not simply to say, "Because you are being misled into believing this is a gravy train, we will give up things that are necessary and essential."
	Finally, there is the issue of our pay. There is another solution to all this, which is that we are paid so much that we do not need the allowances. If such a major change is ever made, the time to make it is before an election when those voting for it will by and large not benefit. But we never dare to do it before an election because that is the very moment when we go out there and account for ourselves and we feel that we might be unpopular.
	We should stop crawling before this press onslaught. Yes, there have been abuses. Do we blame all general practitioners for Harold Shipman? Do we say that because a handful of teachers have been convicted of paedophilia, all teachers are bad, and that because more than a handful of accountants are crooks, all accountants are bad? As for lawyers, I will not even go there. The answer is no. Therefore, although there have been and always will be some people in Parliament who are not as straight as they should be, we should not allow ourselves to be tarred by that.
	We deserve to be paid properly, we deserve to be reimbursed for reasonable expenses incurred, and we deserve to be allowed to do our jobs properly. If we do not do that, one of two types of people will come into the House: those who can afford not to be recompensed and those whose pay is so low that to them it all looks like something very grand. The vast ranks in between—the professionals, those who are paid a reasonable but not excessive amount—will not come to this place, and the press and the media at the moment are doing their level best to ensure that Parliaments of the future will be composed of people of substantially lower quality than Parliaments of the past.

Shailesh Vara: What a performance to have to follow!
	This is an important and necessary debate, particularly in the context of the vote of 3 July. I appreciate the strength of feeling that has been expressed on both sides of the House, and the fact that there was passion on both sides of the argument clearly demonstrates the need to have this debate again. It is regrettable that the debate has regularly turned into a partisan affair.  [ Interruption .] This issue affects and impacts on every single Member of Parliament, and for Labour Members to make it a partisan issue is a discredit to them and the House.

Rob Marris: Will the hon. Gentleman give way?

Shailesh Vara: I should like to make some progress.  [Interruption.] I shall be more than happy to give way later, but I am under a time constraint and I should like to make progress.
	I wish to make it absolutely clear that this issue is seen by the public outside as a House issue that affects all Members. That Members here have used it as an opportunity for cheap political point scoring demeans us all. We all entered Parliament to serve our constituents and our country, and, to the limited extent that we can, to make the world a better place. Unless we properly resolve this issue, it will continue to recur over and over again. That is why it is important to deal with it thoroughly.

Rob Marris: I am grateful to the hon. Gentleman for giving way. He is absolutely right that, in a sense, this is an individual issue for all of us. The flavour of what the right hon. Member for Maidenhead (Mrs. May) said was that she thought—and the Opposition motion tends to suggest this—that hon. Members should rent furnished accommodation. Does the hon. Gentleman think that I could rent furnished accommodation within 10 minutes of Parliament for £650 a month? That is what my outlays are now, including utilities and so on. Secondly, as an individual, does he claim his additional costs allowance for rented furnished accommodation? As he says, this is an individual matter.

Shailesh Vara: What I do will be published later today.  [Interruption.] I am mindful of the time constraint and the fact that— [Interruption.]

Madam Deputy Speaker: Order. Let the hon. Gentleman be heard.

Shailesh Vara: The fact that the hon. Gentleman, along with the rest of the nation, will be able to see how I spend my money speaks for itself. I am not going to waste the House's time.

Kevan Jones: Will the hon. Gentleman give way?

Shailesh Vara: I will not; the hon. Gentleman has spoken.
	What is required in the House is leadership. We had the opportunity for leadership to be exercised by the Prime Minister on 3 July. His response was not to turn up to vote. When my right hon. Friend the Leader of the Opposition asked him earlier why he did not vote then, the Prime Minister ducked the issue. When asked by a journalist why he did not vote, he said that he had been in a meeting. Let me make one thing absolutely clear: the Prime Minister should be aware that he has a suite of offices just behind the Speaker's Chair, and he would be well advised to have his meeting there when there are important debates, so that when there is a vote he can miss the meeting for a couple of minutes, vote, and then continue with it.

Emily Thornberry: On the matter of ducking the issue, will the hon. Gentleman inform the House about how much money he gets for his directorship of Saffron Ridge Ltd?

Madam Deputy Speaker: Order. That is not in order.

Shailesh Vara: The hon. Lady proves my point that this is an issue of the House, and she demeans herself more than anyone else.
	In the absence of leadership from the Government, it is right that there should be leadership on the Conservative side: later today, we will publish the right-to-know form in respect of all our Front Benchers.

Lynne Jones: Will the hon. Gentleman give way?

Shailesh Vara: I will not, because I am under a time constraint. Frankly, the public deserve better than the partisan contributions from the Labour side.
	The right-to-know form will itemise expenditure, and I hope that the Government will follow suit. As parliamentarians, we speak of transparency, openness and accountability from individuals, organisations and corporate Britain; it is only right and proper that we should apply those same rules to ourselves. That is why there should be greater auditing of our allowances and why we should be subject to the levels of scrutiny that we expect for people outside.
	When family members are employed, it is right and proper that, in the interests of openness, we should say who they are and give a broad indication of the salary band into which they fall.
	On the subject of staff costs, let us clarify an issue that has been mentioned during the course of the debate. The general public believe that the words "expenses" and "allowances" refer to money that goes into our pockets and that it is money in addition to our salaries. It is therefore right that we should make it clear that up to £100,000 of that money goes towards our staff to help us to do our jobs properly. It would be absurd if somebody were to say to a headmaster that the salaries of his teachers were to be classed as his expenses, or if a manager or director were told that the salaries of all the people working under him were to be classed as his expenses, so it is absurd that the salaries of our staff should be classed as expenses. We need to clarify that in the mind's eye of the public.  [ Interruption . ] A lot of chuntering about directorships is going on from sedentary positions. May I remind Labour Members that there are a lot of directorships on their side of the House as well? Perhaps they might look at the entries of a lot of their former Ministers in the Register of Members' Interests.

Madam Deputy Speaker: Order. The hon. Gentleman must continue by winding up the debate that has taken place.

Shailesh Vara: The hon. Member for North Southwark and Bermondsey (Simon Hughes) made a typical contribution in which he was critical of the 21 Conservative Members who voted for the amendment that was carried on 3 July. However, had 28 of his Liberal Democrat colleagues, including his leader, bothered to turn up and vote, the amendment would not have been carried. Believe me, one does not have to be a rocket scientist to work out that 28 is a hell of lot more than 21.
	The hon. Member for Middlesbrough (Sir Stuart Bell) spoke with considerable thought and reason, and I compliment him on everything that he said. He is right that this matter needs to be resolved before the next general election, because the public expect it and it impacts on all of us. My hon. Friend the Member for South Staffordshire (Sir Patrick Cormack) spoke with typical eloquence and set out his position thoroughly. It is a position with which I disagree, but he certainly put it on the record.
	I regret that the right hon. Member for Warley (Mr. Spellar) and the hon. Member for North Durham (Mr. Jones) chose to make extraordinarily partisan speeches, to the point where the Deputy Speaker had to reprimand them and remind them of the wording of the motion. The hon. Member for North Durham said that we should look only at the rotten apples of recent years. Let me remind him that in recent years two Labour Prime Ministers have had the police knocking on their doors as regards money and financial irregularities. Let us remember— [ Interruption . ]

Madam Deputy Speaker: Order. The House must come to order.

Shailesh Vara: I reiterate that this is a House issue that concerns all Members, and it must be treated as such.

Stephen Pound: Is it being whipped?

Shailesh Vara: Perhaps the hon. Gentleman should ask his own Chief Whip about that. We will deal with our matters as we wish; the hon. Gentleman should deal with his own matters.
	Time is pressing. All that I would say— [ Interruption . ]

Madam Deputy Speaker: Order. Let the hon. Gentleman continue.

Shailesh Vara: This matter needs to be resolved, and I very much hope that positive action will be taken today to ensure that we move forward. As my hon. Friend the Member for Hexham (Mr. Atkinson) said, we cannot be ostrich-like about it. Unless it is dealt with, we will all be treated with derision by the public, and rightly so. Frankly, Government Back Benchers have done no credit to themselves or to this House.

Helen Goodman: It is a pleasure to take part in the debate and to follow the hon. Member for North-West Cambridgeshire (Mr. Vara).
	I am concerned about the old-fashioned view of Members that the motion perpetuates. The role of the Member of Parliament has changed since the 18th century, when it was a part-time exercise, which those who could afford to fund themselves undertook. David Lloyd George recognised that in 1911, when he referred to the demand from democracy. Voters should choose who represents them and no one should be excluded because they do not have the means to run two offices and two homes—one in the constituency and one at Westminster.
	The second and equally important principle is that public money should be properly used for the purposes for which it was voted. We must demonstrate that that is the case to maintain public confidence. The proposals that my right hon. and learned Friend the Leader of the House presented today do that. First, she proposes that the green book rules be rewritten, thus ending the John Lewis list, and that the body to do it—the Advisory Panel on Members' Allowances—be augmented by two external, independent appointees. That has been discussed with the Chair of the Committee on Standards in Public Life.
	Secondly, my right hon. and learned Friend proposes much stronger audit arrangements, namely a full financial audit by the highly respected and independent National Audit Office, covering all allowances. That will be a proper, risk-based audit.

Theresa May: Does not the hon. Lady understand that the NAO already audits the House of Commons, including all allowances?

Helen Goodman: I understand that. The NAO currently tests and checks the controls to ensure that they are adequate and effective. The difference is that it will now also consider the rules and guidance on what is acceptable, and robust management controls and processes to ensure compliance.

Theresa May: I raised that point earlier. If the NAO is to examine the rules and the guidance on the rules, the Government will have to change the legislation that covers the NAO. It does not have the power to consider policy.

Helen Goodman: The right hon. Lady is not right about that. If she considers the evidence, which the NAO submitted, in appendix 3 of the report, she will realise that we are following the precise recommendation of the Comptroller and Auditor General.
	We also propose that the NAO should report to the Members Estimate Audit Committee, which has two independent members, shortly to be augmented to three. Those proposals have been discussed with the Comptroller and Auditor General.
	Those measures, with the decisions that the House took on 3 July, will reduce to under 1 per cent. the amount of unvouched spending, and significantly strengthen the assurance that the public can have.
	When the right hon. Member for Maidenhead (Mrs. May) spoke at the beginning of the debate, she made several suggestions, which were perceived to be impractical. She also mentioned Members of the European Parliament. Eight years ago, Labour MEPs decided to have their finances audited, and they post on their individual websites the audit letters that they receive. I emphasise that Labour MEPs took that step to improve transparency eight years ago.
	The Leader of the House responded by describing the work of a modern Member of Parliament. She explained why her reforms will fulfil the House's current needs.
	The hon. Member for North Southwark and Bermondsey (Simon Hughes) recapped on the debate of 3 July and made a strong case for improving transparency.
	My hon. Friend the Member for Middlesbrough (Sir Stuart Bell) welcomed my right hon. and learned Friend's proposals. He was one of the MEC three and we are most grateful to him for all his work on the subject. He is right that the role of Parliament is central. That is why the Government made it clear in "The Governance of Britain" White Paper that renewing trust in our institutions is essential to our proposals for constitutional renewal.
	The hon. Member for South Staffordshire (Sir Patrick Cormack) made a considered speech based on his long experience and pointed to the need for appropriate support for all hon. Members.
	My right hon. Friend the Member for Warley (Mr. Spellar) began by reminding us of the sneer in Alan Clark's diaries about those who buy their own furniture. However, he forgot to add that the day began with Alan Clark explaining that that criticism was made by
	"Pinkish toffs"
	who had
	"suffered, for ten years, submission to their social inferior".
	Clearly that is not the snobbish world to which most hon. Members wish to return. My right hon. Friend also drew on his experience as chairman of the Advisory Panel on Members' allowances. He commented on the important fact that the nature of MPs' work is changing and that if we want a House that is truly representative and diverse, we must recognise that in the structure of our allowances.
	The right hon. Member for Penrith and The Border (David Maclean) highlighted the need for a more systematic approach to reform. He is another member of the MEC, and we are grateful to him for the huge amount of effort that he has made. The proposals put forward in the Government amendment build on the work that the MEC did earlier in the year.
	My hon. Friend the Member for Bassetlaw (John Mann) spoke about the problems of malpractice and cases where expenditure of public money has been abused for party political advantage, and about the importance of taking a systematic approach. What he said is absolutely right. That is exactly why we want to extend the National Audit Office audit to cover the systems, to ensure that they, too, are robust and that Members can rely upon them and be assured that the records that they hold are accurate.
	The hon. Member for Hexham (Mr. Atkinson) suggested that some sort of deal had been done on the Government Benches on 3 July, so that Labour Members would be free to vote against the MEC if they voted with the Government on pay. In fact, he is wholly wrong about that. No such deal was done; there was a completely free vote.
	My hon. Friend the Member for North Durham (Mr. Jones) described a catalogue of problems in the last two Parliaments and stressed the importance of financial audit.
	The right hon. Member for Maidstone and The Weald (Miss Widdecombe) said that she wanted to make a robust defence of the position in which hon. Members find themselves. She certainly succeeded. She also pointed to the fundamental weakness in the Opposition motion, in that it will reinstitute a two-tier membership of the House.

Rob Marris: Does my hon. Friend look forward to finding out after this afternoon's vote how many of those who vote for the Opposition motion do not rent furnished accommodation as part of their ACA claim, and therefore hypocritically do not do what the motion says that Members should do?

Helen Goodman: I am sure that there are those who will be extremely alert to the issues that my hon. Friend raises and who will provide us with that information.
	In conclusion, MPs play a vital role in our democracy. They represent their constituents, they legislate and they scrutinise the Executive. To do that they must have adequate resources and they must command the confidence, respect and trust of the public. I believe that the proposals put forward by my right hon. and learned Friend the Leader of the House achieve both those aims, involving independent external members on the panel to review the green book, abolishing the John Lewis list and providing for a full financial audit of all allowances by the National Audit Office. I commend her amendment to the House.

Question put, That the original words stand part of the Question:—
	 The House divided: Ayes 238, Noes 295.

Question accordingly negatived.
	 Question, That the proposed words be there added,  put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
	 Main Question, as amended, put and agreed to.
	 Resolved,
	That this House recognises growing public concern on expenses and allowances for hon. Members and Members of the European Parliament (MEPs); believes that all British Members of the European Parliament (MEPs) should follow all the open and transparent procedures voluntarily adopted by Labour MEPs; further to debate in the House on 3rd July on the control and audit of the public money spent by hon. Members carrying out their duties, further believes that there should be a re-writing of the Green Book by the Advisory Panel on Members' Allowances, augmented by two independent external appointees; further believes that the Panel should keep the Green Book under review and advise on any further modifications, including in relation to reimbursement of reasonable costs of a second residence, to include abolition of the so-called John Lewis list; and further believes that an external financial audit by the National Audit Office, covering all the allowances in the Green Book, should include the rules and guidance on what is and what is not acceptable under the rules, the management controls and processes used by the Department of Resources to ensure compliance with the rules, and the checks and testing of the controls to ensure that they are adequate and effective.

Fuel Duty

Madam Deputy Speaker: I advise Members that Mr. Speaker has selected the amendment in the name of the Prime Minister and imposed a 10-minute limit on all Back-Bench speeches.

Philip Hammond: I beg to move,
	That this House notes that oil prices are now almost $150 per barrel; further notes that diesel in the UK is the most expensive in Europe; acknowledges the sharp rises in fuel prices over the past year and the resulting impact on headline inflation figures; recognises the financial pressure this places on hard-pressed families already struggling with soaring food and housing costs; condemns the Government's continued dithering over the implementation of the two pence increase in fuel duty, planned for the autumn, as neither a sustainable nor a stable way to make tax policy; further notes that a balancing mechanism to adjust fuel duty in line with changes in the price of oil would have reduced the current price of petrol by five pence per litre since March 2008; and calls upon the Government to consider the implementation of such a balancing mechanism to ensure that the burden of rising oil prices is shared fairly between government and families, the sensitivity of the public finances to changing oil prices is reduced and the cost of carbon can be stabilised to send consistent environmental signals.
	This morning, when I heard the announcement of the Government's climbdown on the 2p fuel duty increase, my first reaction was to see it as a triumph for Parliament. No sooner had we tabled a motion accusing them of dithering on the issue than they stopped dithering and acted—a triumph for parliamentary democracy. But then I remembered the by-election and the reality that the climbdown is a triumph not for democracy, but for cynical short-term political calculation.

Stephen Ladyman: Can the hon. Gentleman honestly tell the House that he did not think of the by-election when he tabled the motion in the first place?

Philip Hammond: I am sorry to have to disappoint the hon. Gentleman, but Glasgow, East is not top of the Conservative party's hit list for expected by-election victories. I know things have got bad for the Labour party, but we like to be realistic and we are not expecting to take Glasgow, East in a by-election, as I can reveal today.
	Never mind the protestations that the time to announce any change is the autumn. Forget the always bogus claim that the change was unaffordable because there is no net Treasury gain from soaring oil prices. When the Prime Minister's neck is on the block, principle is thrown to the wind. Nothing cannot be unsaid. No price is too much to pay. For Crewe and Nantwich, it was £2.7 billion. For Glasgow, East, it is £1.1 billion a year in perpetuity. For the Prime Minister's sake, let us hope that he gets better value for money in Glasgow, East than he got for his £2.7 billion in Crewe and Nantwich. As my right hon. Friend the Leader of the Opposition said yesterday, we will have to take good care of Members of Parliament for the next 18 months, because at this rate the public finances cannot stand the cost of too many more by-elections. With the 10p U-turn and 2p U-turn now out of the way, I presume that it is only a matter of time—or perhaps timing—before we hear an announcement of the car tax U-turn.

Tom Clarke: As someone who spent time recently in Glasgow, East, and not for the first time, may I put it to the hon. Gentleman, first, that his hon. Friends will be astonished that he has conceded the by-election, and secondly, that nothing he has said so far relates remotely to anything I have been hearing in Glasgow, East?

Philip Hammond: I do not know which doorsteps the right hon. Gentleman has been on in Glasgow, East, but that is not what I hear from my hon. Friends who have been there.
	After months of dithering, we have a decision—I know how difficult the Prime Minister finds it to make decisions—to cancel the tax rise in the run-up to an election. It is not surprising, as the soaring cost of living is the No. 1 concern for families in Glasgow, East and elsewhere. With earnings growth stagnant for the past two years, household debt at record highs, housing asset values sliding, and the price of everything we consume soaring, is it any wonder that families are feeling the pinch? Inflation is at its worst level for 16 years—more than double the rate the Government inherited from their predecessor in 1997. The latest figures published this week show the consumer prices index up 0.5 per cent. in a single month to nearly twice the Government's target, and factory gate prices rising 10 per cent. in the year—the biggest annual percentage increase since February 1982, and an indicator of potential further consumer price inflation to come. The Governor of the Bank of England warns that inflation is likely to rise still further and to persist at the higher level until well into 2009.
	At the heart of that inflationary pressure is the soaring cost of oil, and the consequential increases in the price of petrol and diesel at the pumps. More than a quarter of the increase in consumer prices over the past year is due to the direct effects of fuel price increases, not counting the indirect impact that increasing fuel prices have on the cost of goods and services throughout the economy.

Lembit �pik: Is the hon. Gentleman aware that in my constituency average salaries have gone down 4 per cent. in the past 12 months? Coupled with the necessarily high dependence on private transport in a rural and sparsely populated area, the effect of the increase in fuel costs is exacerbated for those poorer individuals in Montgomeryshire.

Philip Hammond: I recognise the hon. Gentleman's point. The situation is worse in some places than others, but families across Britain are feeling the pinch.
	The Government say that the problem is internationalNothing to do with us, guv. But about 60 per cent. of the current retail price of fuel is accounted for by tax. At 115pnice work if you can find itthe price of a litre of unleaded petrol is made up of just over 50p in fuel duty and 17p in VAT. Before I spell out the detail of how our fair fuel stabiliser will work, let us consider the systemfor want of a better wordthat is in place.
	Instead of cushioning the blow and helping families to cope when oil prices rise, under the present system the Government add to the rising cost of living. Fuel duty is set to rise every year by at least the rate of inflation, regardless of what happens to the price of oil, before taking account of VAT, which rises automatically as prices rise. But that does not mean that the system runs smoothly. Inevitably, there is annual pressure on the Chancellor and the Prime Minister to postpone or cancel increases in fuel dutya practice that the Prime Minister adopted regularly during his term in the Treasury. That pressure intensifies, as we have seen, if a Government are in trouble or face a tricky by-election. Far from automatic inflation increases in the rate of duty occurring predictably, the level of real duty is the subject of short-term political calculation, year after year, with the inflation increase having been cancelled or postponed in five years out of the last six, creating uncertainty for businesses and families, making the public revenues less predictable, and weakening environmental signals in the tax regime.

Pete Wishart: In the past few months, the Conservatives have accused the Labour Government of nicking some of their ideas, and they are right to do so. I know that the hon. Gentleman is a fair-minded Member of the House. Will he therefore accept and acknowledge that his stabiliser, or whatever it is called, is a direct snatch from the Scottish National party? Will he explain why, when the idea was put to the Finance Bill Committee by my hon. Friend the Member for Dundee, East (Stewart Hosie), the Conservatives inexplicably failed to support that measure?

Philip Hammond: I welcome the hon. Gentleman's contribution, and I am happy to acknowledge the work that the Scottish nationalists have done on the challenges that we face on fuel prices, but I am going to reveal something to the House: the original author of the fair fuel stabiliser idea is, I think, none other than the Foreign Secretary. Hon. Members may remember that he urged the then Chancellor a couple of years ago to introduce something similar in his Budget.

Si�n Simon: It is enlightening that the hon. Gentleman manages to pray in aid the Foreign Secretary. The hon. Gentleman and I were on the Finance Bill Committee for seven weeks, and the hon. Member for Dundee, East (Stewart Hosie) did indeed propose the policy. Not only did the hon. Member for Runnymede and Weybridge (Mr. Hammond) not support it in Committeeand I think he voted against it on the Floor of the Housebut he explained at some length in Committee why it was a wrong policy.

Philip Hammond: My recollection is that the measure put forward by the Scottish nationalists in Committee was not as set out by the hon. Gentleman. However, before he rallies around the Chief Secretary in what he might think is a career-enhancing move, he should think about how it was the Foreign Secretary who urged the now Prime Minister to adopt the policy. The hon. Gentleman might think about his career prospects in those terms.

Si�n Simon: rose

Nigel Griffiths: rose

Philip Hammond: I am going to make a little progress.
	As usual this year, the Government have dithered and prevaricated over the 2p rise originally scheduled for April, then postponed until October, and now off the table in July. Who knows what would have happened if it were not for the by-election? We had a nod from the Prime Minister at the Liaison Committee on 3 July when he said that
	you will find that in most years since 2000 that the duty has actually been frozen...it is clearly a matter that will be looked at very, very carefully over the next few weeks.
	There was a wink from the Chancellor on 28 May when he said:
	I intend to come back to the issue of the fuel tax increase that would be due this October.
	That is not a sustainable way to make tax policy. Instead of a clear formula based on transparent principles that people can understand, it is an ad hoc system driven by the political convenience of the Prime Minister rather than by sound economics.

Nigel Griffiths: If the SNP's policy was not, as the hon. Member says, the policy that he is proposing, why did he not propose it when he had six weeks to do so in the Finance Bill Committee? Is this just another policy that is blowing in the wind?

Philip Hammond: We work hard on our policy announcements. We base them on sound research, which I shall be quoting in a moment, and we consult on them, unlike the Government, before we introduce new tax proposals.

Stephen Ladyman: Will the hon. Gentleman give way?

Philip Hammond: I will make a little progress because the hon. Gentleman has intervened once already.
	There is a better way. At times like this, people look to their Government to help themto give them a hand when times are tough. The UK's unique advantage as an oil producer allows us to offer support to families when oil prices soar, to stabilise the public finances and make them more predictable, and to reinforce the long-term green signals that the tax system sends by adopting Conservative proposals for a fair fuel stabiliser that will build in the kind of response that we heard from the Government today, not as an ad hoc political statement but as an automatic and thus reliable response to rising oil prices. We must operate in that way if we are to deliver the climate of economic stability that Britain needs. We need government by clear principles, transparently and consistently applied, not government by nods and winks.
	While the Labour party, clinging to office, treats fuel duty as a short-term political football and people like fools, the Conservatives in opposition have been doing the work to come up with clear, well thought through proposals to introduce the fair fuel stabiliser that Britain clearly needs. Before I explain how it would work, let me list five principles that we have set out which a reformed system of fuel duty should observe.
	First, any reform must help families when the cost of living is rising, because part of the function of Government is to dampen the shocks that the economy receives by putting something aside during the good times to help out during the more difficult times. Secondly, any reform should reduce the inflationary impact on the economy from fluctuations in international oil prices. Thirdly, because of Britain's position as an oil-producing country, reform should reduce the sensitivity of the public finances to changes in oil prices, improving the Treasury's ability to forecast and budget for the future. Fourthly, despiteor perhaps because ofthe immediate challenge posed by soaring oil prices, we should not lose sight of our long-term green agenda. Any reform should provide more certainty about the price of carbon, encouraging the long-term shift towards lower-emission vehicles and alternative methods of transport that will be necessary to meet our climate change objectives. Finally, any reform should be transparent and simple to administer.

Lynne Jones: Will the hon. Gentleman, or the shadow Chancellor, be responding to the letters in Monday's edition of the  Financial Times, not least from the hon. Member for Twickenham (Dr. Cable) but also from Charles Brendon of Exeter College, who suggested that the Conservative party's economic capabilities were somewhat limited?

Philip Hammond: We will not take any lectures from Charles Brendon of Exeter College. The hon. Lady may or may not have done her research, but Mr. Brendon is a Labour party activist and a graduate student at Exeter. However, in a moment, I will refer to the letter in the  Financial Times from the hon. Member for Twickenham (Dr. Cable) and to his previous comments.

Stewart Hosie: The hon. Gentleman has referred to the environment. Although managed increases such as the Government's proposed new fuel duty escalator from 2010, with duty rising annually at 0.5p a litre above inflation, may well squeeze out unnecessary usage, does he agree that the reason we need a regulator-stabiliser-moderator is that when massive spikes are unmoderated, the use of managed increases as an environmental tool is completely destroyed?

Philip Hammond: I entirely agree. We must also bear in mind that there are downward movements in oil prices as well, which undermine the incentive to invest in fuel-economising technology.
	So what is the fair fuel stabiliser? Let me put it simply: under a fair fuel stabiliser, when oil prices went up, fuel duty would fall, and, in a quid pro quo, when oil prices went down, fuel duty would rise. If our fair fuel stabiliser had been introduced in the 2008 Budget, fuel would be about 5p a litre cheaper at the pump, which would save about 3.50 on a tank of fuel for a Ford Mondeo, and inflation would be not 3.8 per cent. but about 3.3 per cent. Government revenues would not differ from the Budget predictions, which were based on an oil price of $84 a barrel.  [Interruption.] It is amazingis it not?that the Treasury Whip, the hon. Member for Waveney (Mr. Blizzard), who sat in complete silence throughout the passage of the Finance Bill, now apparently cannot keep his mouth closed. He seems to have plenty to say.
	If, instead of rising, oil prices had fallen since the Budget, fuel duty would have risen. Prices at the pump would have fallen, but not by as much as they would have without the fair fuel stabiliser. Government revenues would again not have differed from the Budget forecast. The overall effect of such a stabiliser is to dampen the impact of fluctuating oil prices, softening the blow of an increase in oil prices on the pump price of petrol and diesel, but dampening also the downward movement when oil prices fall and duty rises to offset part of the drop. Therefore, on every count the fair fuel stabiliser would deliver a better result than the current system, as well as being more transparent and predictable. A fair fuel stabiliser would help to stabilise family finances, stabilise the public finances, dampen inflationary pressures and improve long-term signalling of the price of carbon. When oil prices rise, family budgets are put under pressure. The fair fuel stabiliser would moderate the impact of oil price increases on families by offsetting about half of the increase with a corresponding reduction in fuel duty, so the pump price would rise by about half the amount it otherwise would.

Jamie Reed: Does the hon. Gentleman believe there is any evidence to suggest that speculation in the markets increases the price of oil?

Philip Hammond: That is slightly wide of the question we are dealing with, but from what I have seen there is no evidence that speculation is driving the price of oil in the markets. Obviously, speculation plays a role in the oil markets, but I have not seen any evidence that suggests that curbing oil futures trading activity would solve the problem we face today, as that is based on more fundamental factors.
	To return to my earlier comments, of course there has to be a flip-side. When oil prices fell, the duty would go back up again so that prices at the pump would fall more slowly than they would under the current system. The hon. Member for Edinburgh, South (Nigel Griffiths) asked what would happen if oil prices did not fall, implying that only when oil prices fell and the duty rose again could the public finances be put back into balance. I want to disabuse him of that notion. The balancing item in the public accounts is the windfall increase in North sea taxation that the Government receive when oil prices increase.
	I would have thought that helping families by smoothing the violent fluctuations in the pump price that can otherwise occur might appeal to someone who once claimed to have ended boom and bust.

Stephen Ladyman: I am not going to viciously attack the hon. Gentleman's ideas because I do not think he stole them from the Scottish National party or the Foreign Secretary; instead, I think he stole them from an article I wrote in  Progress magazine. However, he seems not to have taken account of the following point. It is true that when fuel prices increase, we might get more from VAT on the fuel, but if the price of fuel is taking up more of an individual's spend, the other areas of the economy will lose spend and the revenue will go down in those areas. Under the hon. Gentleman's measure, how will the Exchequer take account of such changes in the economy?

Philip Hammond: If those comments represent the hon. Gentleman's line of approach, I certainly did not take my ideas from his article. He is right that this is nothing to do with VAT. There can be arguments at the margin, but, broadly speaking, the VAT balances itself out across the economy. I also agree that oil price increases have a negative effect in other parts of the economy. However, if he will bear with me for a few moments, we will come to the evidence from the National Institute of Economic and Social Research about the net impact on Treasury revenues across the economy as a whole.
	What will be the impact on the public finances? Let me deal with myth No. 1, which for shorthand I will call the Labour myth. The Chief Secretary has claimed that our proposal for a fair fuel stabiliser would lead to a 3 billion black hole in the public finances. Never mind the fact that she should not be the first person to talk about black holes in the public finances, but this is far from the truth, as I believe she very well knows. The truth is that the only independent UK economic forecaster who has done the necessary work to comment definitively on this issue is the National Institute of Economic and Social Research, and it has concluded that oil price rises generate a positive impact on the public finances, even after taking into account the secondary effects of oil price rises on the economy overall, and thus on non-North sea Government revenues. According to the National Institute of Economic and Social Research, the net benefit to the Treasury is about 140 million for every $1 dollar change in the price of a barrel of oil. So, when the oil price increases, net Government revenues, after taking into account all the effects across the economy of that oil price rise, also increase. It follows logically that when the oil price falls, Government revenues will also fall, by the amount of reduction in North sea tax revenues, less the positive effect from the increase in activity across the rest of the economy with which an oil price fall would normally be associated. Overall, there is a loss of revenue for the Government when oil prices fall. In other words, there is a spectacular misalignment of interests. An oil price rise, which is bad for families and for businesses, delivers a windfall to the Treasury, whereas an oil price fall, which is good for families and for businesses, creates a hole in the Treasury's revenues.
	The fair fuel stabiliser aligns the interests of consumers with those of the Treasury, and it shares the pain and shares the gain. It makes the public finances more stable, by reducing the impact of changes in oil prices, upwards or downwards, on Treasury revenues, making it easier for it to project what future revenues will be and making those projections less vulnerable to the vagaries of the international oil market.

John Redwood: I am glad that my hon. Friend is making this point, because it is idiocy to say that there will be a black hole under this scheme when the oil price rises. As he said, there is a 60 per cent. tax at the pump. If the oil comes from the North sea, there is a further tax, which is not included in that 60 per cent. There is an average tax rate of about 42 or 43 per cent. on the economy as a whole, so, of course there will be more revenue when the oil price rises. I find it extraordinary that people go on making these idiotic remarks about black holes when the opposite is true.

Philip Hammond: We can speculate on why the Government have taken the line that they have. We do not rule out the possibility that, notwithstanding the Chief Secretary's fairly virulent attack on this policy when we launched it, we will find it in the pre-Budget report or in next year's Budget as the centrepiece of new Labour's fight back.

Jeremy Browne: Given that oil prices have risen by more than the Chancellor predicted at the time of the Budget, will the hon. Gentleman inform the House what has happened to stamp duty revenues compared with the Budget estimates? Does he think that there should be a stabiliser in place to try to balance that part of the economy too?

Philip Hammond: Unfortunately, because we have not been given an interim statement from the Government, we do not know precisely what has happened to stamp duty revenues. I hear a whisper that they are substantially down, but that is a different argument, because we are talking about what is happening to oil prices and the impact on the economy of an oil price increase.
	As we are dealing with the Lib Dems, let me address myth No. 2, which is propagated, surprisingly, by the hon. Member for Twickenham (Dr. Cable). For the purposes of shorthand, I shall call this the Lib Dem myth, although there are many Lib Dem myths. The hon. Gentleman, who likes to think he knows a thing or two about oil, says that the fair fuel stabiliser would require the Government to predict the future price of oil. I am surprised at him, because although I do not always agree with what he says, I find that it is usually based on fact, and nothing could be further from the truth than that comment. The stabiliser will mean that Government revenues remain broadly the same, whether oil prices go up or down, because any windfall or shortfall from the North sea will be offset by a decrease or increase in fuel duty. The truth is that the present system requires the Government to predict future oil prices, when they make their revenue forecast in the Budget, thus leaving the public finances exposed to fluctuations in the oil market. Under the fair fuel stabiliser, that volatility in public revenues is removed, and the Lib Dem myth is demolished.
	We are consulting on the precise level of the reduction in duty that should be associated with any given increase in oil prices. The example we have used and published, where the fair fuel stabiliser reduces the price increases at the pump by half, is broadly revenue-neutral to the Treasury on a conservative estimate of 100 million of net revenue gain for each $1 change in the price of a barrel of oilthat is a far lower figure than the National Institute of Economic and Social Research's model predicts.
	At some stage this afternoonI believe that this would be called a pre-emptive strikeI am expecting to hear from the Chief Secretary, in an attempt to shore-up the Labour myth, about the Institute for Fiscal Studies. She is fond of quoting that highly respected body when it suits her, but on this issue, for very good reason, it has little to say. The IFS correctly says that its modelling leaves it unclear about the precise size of the positive impact on the public finances from an increase in the oil price, over and above the cost of the 2p U-turn that the Government have done today. However, the IFS is in no doubt that the impact is positive.
	The Chief Secretary has produced the IFS's statement with a flourish, as though it demolishes the NIESR analysis. It does not. Unclear means precisely what it says and the IFS is unclear for a reason. It does not have a dynamic macro-economic model that would allow it to analyse the likely impact of an external shock such as an oil price increase. That is not the business that it is in. The NIESR has such a model and is in the business of conducting such analysis. It is the body with the authoritative view on the subject and the Chief Secretary can quote the IFS as loudly and as often as she likesits position, which we have checked again with it during the past few days, is that it simply does not know the answer to the question because it has not done the work and, what is more, it does not have the tools to do the work. So, the Labour myth is demolished, too.

Rob Marris: Will the hon. Gentleman give way?

Philip Hammond: At last, the hon. Gentleman! I thought that I was going to get to the end of my speech without his intervention.

Rob Marris: I am grateful to the hon. Gentleman for his usual generosity. He is talking about the research. I do not know the answer to this questiona lawyer should never ask a question to which they do not know the answerbut is any other country using such a mechanism? If so, what does the research in that country suggest is its effect?

Philip Hammond: I do not have a precise answer about the work that has been done in relation to other economies. I have looked only at the work that has been done in relation to the UK economy. That is a fair question, and I shall kick myself for not having looked at it and I shall go away and do so. The hon. Gentleman's comment is very useful, and I am sure that my colleagues have looked into the matterI shall talk to them about it.
	The Labour myth is demolished. A fair fuel stabiliser would stabilise family finances and the public finances, but it will do more than that. It will also help to stabilise inflation. If half the increase in fuel prices over the past year had been offset by lower fuel duty, consumer price inflation would be 3.3 per cent., not 3.8 per cent. The pressure for wage increases and the industrial action behind them would be accordingly reduced. So there would be greater stability in family finances, greater stability in the public finances and lower inflation in a period of rising oil prices.
	There is one other environmental benefit of the fair fuel stabiliser. Environmental taxes, such as fuel duty, can play an important role in reducing carbon emissions. They work mainly by encouraging a long-term shift towards lower emission vehicles and alternative methods of transport in response to higher fuel prices at the pump. A stable carbon price, as the Stern review argued, helps individuals and businesses to factor environmental costs into medium and long-term investment decisions and behaviour.
	The fair fuel stabiliser would allow the average real value of fuel duty to be maintained to take inflation into account, as is supposed to happen now. When oil prices were rising, pump prices would rise, but by less than they do now. The long-term signal to consumers would be maintained. When oil prices fell, the price of fuel at the pump would fall, but by less than it would do otherwise. The incentive to consumers to adopt green behaviour would be strengthened. The risk of the message being undone by a downward movement in oil prices would be reduced. Overall, clearer, less volatile signals would be delivered, creating a stronger, more consistent environmental message.
	So, we would have relief for families when oil prices were soaring, greater stability and predictability in the public finances, a reduction in the upward pressure on inflation and stronger, clearer and more consistent environmental tax signals. The fair fuel stabiliser is a practical, deliverable response to the challenges that fluctuating oil prices bring. As an oil producer, Britain is almost uniquely able among the industrialised countries to introduce such a measure and to give ourselves a competitive advantage in the globalised economy.
	The proposal makes sense at every level. It would provide a long-term stabiliser for the British economy and much-needed relief for hard-pressed families facing soaring fuel bills and hard-pressed businesses struggling to compete with those who have access to lower duty fuel.

Nigel Griffiths: Will the hon. Member give way?

Philip Hammond: I am finishing now.
	When times are hard, people look to their Government for leadership. They look to their Government for a helping hand. They look for practical actions to address the pressures that they are facing. They do not want excuses that it is all someone else's fault, or self-congratulatory lectures about how well prepared Britain is to weather the storm when it patently is not well prepared. People want practical help and, as we develop ideas such as the fair fuel stabiliser, they will know that a future Conservative Governmentunlike this lotwill be on their side, not on their backs.

Yvette Cooper: I beg to move, To leave out from House to the end of the Question, and to add instead thereof:
	recognises the pressure that the increase in fuel prices, caused by pressures from the international oil market, has put on business and families; welcomes the Chancellor's decision to defer the planned two pence per litre increase in fuel duty that was due to take place in April 2008; notes that while fuel prices have increased by over 20 per cent. since last October, fuel duty has stayed constant; also notes that had the escalator introduced in 1993 been in place since 1999, fuel duty would now be 29 pence per litre higher; supports the Government's global leadership on this issue, in particular at the recent Jeddah Energy Meeting, and welcomes the Government's intention to host a follow up to this meeting in London later this year; further recognises that the Government does not receive a significant windfall when oil prices rise, because any additional revenues from the North Sea are likely to be offset by other effects; and therefore further notes that a system which would automatically cut fuel duty when oil prices rise would be destabilising, creating volatility for the public finances and uncertainty for the financing of public services, and would create considerable pressure for tax increases elsewhere.
	I welcome the chance to reply to this debate. The entire world is affected by the big increases in the price of oil. A year ago, oil cost $77 a barrel, but this week it reached almost $145nearly twice as high. Ten years ago, oil cost $10 a barrel, but it recently went up by $10 in just one day. The impact of the high oil price is being felt right across the world. It is driving up prices at the pump, and people's gas and electricity bills as well. We are seeing those price increases right across Europe and the world.
	The effects are being felt here at home too. In Castleford this morning, unleaded petrol was going for more than 1.20 per litre. That places pressure on household budgets, and that is why we have deferred the fuel duty increase that was set for April. It is also why the Chancellor has announced today that the 2p fuel duty increase proposed for the autumn will not go ahead.

Pete Wishart: Can the right hon. Lady do something that the Prime Minister failed to do earlier this afternoon and concede that the 2p postponement is all to do with the by-election? If the Scottish National party can achieve that just by threatening one of Labour's most solid majorities, imagine what we can achieve when we win that by-election.

Yvette Cooper: I have to say that that is complete nonsense. Fuel duty is often set to increase in the autumn, but on a number of occasions, the rise has been either postponed or put back. In 2004, for example, the deferral of the autumn increase was announced on 20 July. Similar decisions in 2005 and 2006 were announced on 5 July and 19 July, respectively. The date today is 16 July, which means that today's announcement is entirely in keeping with decisions taken in previous years.

Justine Greening: Will the Chief Secretary clarify for the House the impact of today's announcement on the forecast for public finances set out in the Red Book?

Yvette Cooper: The hon. Lady is right that the announcement will reduce the amount of fuel duty revenue for this year. The precise figures will be set out in the pre-Budget report, as happened in 2004, 2005 and 2006. That is the normal practice that we have always followed.

Kenneth Clarke: rose

John Redwood: rose

Yvette Cooper: I shall make one more point and then give way. The figures show that fuel duty has risen just three times since 1999, when we abolished the fuel duty escalator introduced by the previous Government. Fuel duty has fallen in real terms by 17 per cent. since then.
	I am spoiled for choice as to who to give way to first, but I shall give way to the right hon. and learned Member for Rushcliffe (Mr. Clarke) and then to the right hon. Member for Wokingham (Mr. Redwood).

Kenneth Clarke: I find it quite incredible that the Chief Secretary can talk about a tax change that has been announced this morning yet refuse to tell the House what the cost will be. It is completely incredible that the Treasury is not capable of giving her a precise figure for the estimated loss of revenue. It is quite scandalous for her to say that the House of Commons will not be told the cost until November.

Yvette Cooper: As I said, we have set out the information today in exactly the same way as we have done in previous years. I welcome the right hon. and learned Gentleman to the debate, as he was the author of the Conservatives' fuel duty escalator, which was introduced in 1993. I can tell the House that, had that escalator continued, fuel duty would be nearly 30p higher today, while the petrol price, including value-added tax, would be nearly 35p per litre more expensive. Indeed, had we increased fuel duty each year simply in line with inflation rather than with the escalator, fuel duty would also be 10p per litre higher today. As a result of the decisions that we have taken on fuel duty, vehicle excise duty and other car taxes, the tax revenue from fuel duty and VED is in fact lower now than in 1997, in real terms.

John Redwood: The Minister must know that she is hundreds of millions to the good so far this year, given the Budget estimates on total oil taxation. Will she tell the British public how many more pence per litre they are paying at the pump in total in tax on North sea oil routed through a British pump than was envisaged in the Budget forecast?

Yvette Cooper: As I have said, we announced today that we are not going ahead with the 2p increase in fuel duty that was proposed for this autumn. I want to come on to the detail of the Opposition motion, as the Opposition have set out some details of their proposals.

Stewart Hosie: I come back to the issue of cost, as it is rather important. Will the Minister not confirm that the cost of the change will be 500 million this year? That will be more than offset by the increase in North sea tax, given that the projections were based on a price of $84 a barrel, not $145 a barrel, which was the price yesterday. Will she at the very least confirm that the cost will be 500 million, but that that will be more than offset by increases in revenue from the North sea?

Yvette Cooper: The hon. Gentleman is right to say that the figures that we set out at Budget time for increased revenue resulting from fuel duty will not now be as expected. However, the overall impact on the public finances of the increases in the world oil price, and other changes that have occurred simultaneously in the world economy over the past few months, will be set out as part of the pre-Budget report. We have to recognise that what has driven the big increases in oil prices, and in the price at the petrol pump, is changes in the world economy, the rising demand for oil from China, India and developing countries, and the fact that supply has not increased to keep up.
	Before I turn to the detail of the Conservatives' motion, it is worth looking at what they did not include in their motion. There is no mention of the causes of the rise in world oil prices, no call for action on the world stage to increase oil production in the short term, no plan for working with international partners to get oil markets moving, and no proposals to cut dependency on oil in the medium term. Little wonder, because when it comes to those big questions, the Opposition have no answers at all.
	The Conservatives turn their backs on Europe and their international partners, will not back nuclear power or the planning reforms needed to get alternative energy supplies moving, and will not face up to the big challenges facing the country. They will not do the things that are needed to reduce our dependency on oil, gas and fossil fuels in the medium and long term, or to reduce dependency across the world. The demand for oil from developing countries will not go away, so for the sake of the economy, and the planet, we need to reduce our dependency in the medium term. That means working with Europe and the G8, and doing all the things that the Conservative party, with its bunkered, anti-European mentality, refuses to do.

Sammy Wilson: All the issues that the Minister mentioned may well be matters that should be considered in the House, but is today's debate not supposed to be about fuel duty?

Yvette Cooper: It is indeed, and that is why I want to spend some time doing what the Opposition motion asks us to do, and consider the implementation of what the Opposition call
	a balancing mechanism to adjust fuel duty in line with changes in the price of oil
	in a way that
	would have reduced the current price of petrol by five pence per litre since March 2008.
	Hon. Members across the House will have noted that that proposal was first put forward by the Scottish National party during proceedings on the Finance Bill, and that there was a deafening silence from the main Opposition party on the issue, despite the fact that it had considerable opportunities to raise the matter during proceedings on the Bill.

Justine Greening: rose

Yvette Cooper: I will happily give way if the hon. Lady will point me to the sections of the Committee proceedings in which she discussed and strongly supported the proposals for such changes to fuel duty.

Justine Greening: I shall be delighted to. If my memory serves me correctly, it was on 15 May, at the end of the seventh sitting. I spoke very empathetically about the proposal, but said that we could not support it. In fact I was so empathetic that the right hon. Lady's colleague, the Exchequer Secretary to the Treasury, said that I was supporting it, so she obviously thought that I saw some merit in the idea then.

Yvette Cooper: It is funny that the Opposition just forgot to vote when they had a chance to, when the proposal was put before the House.
	I have been given the report of proceedings in the Finance Bill Committee when this matter was discussed. When the Exchequer Secretary said that the hon. Lady seemed to be supporting that proposal, she responded:
	I just wanted to correct the Minister. Just before we adjourned after the morning sitting, she said that I had supported the new clause, but in fact I said that we did not. [ Official Report, Finance Public Bill Committee, 15 May 2008; c. 244.]
	The hon. Lady clearly did not, as of a few weeks ago, support this kind of stabiliser. I am happy to give way to her again if she wants to clarify the position.

Justine Greening: There is nothing particularly stunning about the fact that we saw a lot of merit in the fact that the Scottish nationalists were trying to tackle the underlying problem of a volatile oil price and its effect on fuel costs, but we felt that the particular way in which they were doing it would not quite work. There is nothing cynical about that, or complex; it is just that Ministers have such weak arguments that they now have to resort to picking out phrases and taking them entirely out of context.

Yvette Cooper: I notice that later in the debate, when talking about the suggestion that the hon. Member for Dundee, East (Stewart Hosie) had made to deal with the price rises, the hon. Lady said:
	I must say that it is not one that I agree with. [ Official Report, Finance Public Bill Committee, 15 May 2008; c. 236.]
	I look forward later in today's debate to hearing her explain quite why the technicalities of the hon. Gentleman's proposals were not workable, but that her own proposals are.
	I come now to the workability, or practicality, of the proposals of the hon. Member for Runnymede and Weybridge (Mr. Hammond). The Opposition say that if their proposals had operated since the Budget, fuel duty would be 5p lower today. Their proposal is effectively for a 1p change in duty for every $6 change in the price of a barrel of oil. That would certainly keep Her Majesty's Revenue and Customs, and the industry, busy. Over a quarter of a year, we have seen not simply a $6 variation in the price of oil, but a $60 variation. On 6 June, oil prices rose by $10 in a single day. Yesterday they fell by $10 in the space of several hours, ending the day $6 down.
	Under the hon. Gentleman's proposals, therefore, fuel duty would have gone up by 1p yesterday alone. If fuel duty changed every time oil prices varied by more than $6 from the Budget forecast, rates would have changed more than 25 times just since the Budget 18 weeks ago: down on 18 March, up again on 19 March; down on 26 March, up again on 31 March; down on 2 April, down on 9 and 18 April. In one week in May, duty would have changed four times in a week: up, down, up, down. This is not a fuel duty stabiliser; this is a fuel duty yo-yo. Oil prices are now not only high, they are very volatile, and right now some of that volatility is absorbed by the private sector, as it does not reflect every change in the price at the pump, but that would not be the case under the hon. Gentleman's plans. Under his proposals the Government and the taxpayer, rather than the industry, would take the risk and pay the price of smoothing the figures on the forecourts. Ever-changing rates would cause complexity for oil producers and tax collectors, and be confusing.

Rob Marris: May I also point out that the Conservative party's proposal lacks intellectual bravery? If it was intellectually brave about this, rather than putting forward a mechanism that would see the pump price rise by only half the increase in the oil price, if it arranged its figures differently it could stabilise the price completely, but it is not prepared to do that, because it realises that it would be unworkable. One of the Conservatives' five principles is for certainty, but even under their own mechanism there will not be certainty of pump prices.

Yvette Cooper: My hon. Friend is right. In the end, the point is that when setting fuel duty, it is right to look at what is happening in the marketsat oil prices and at the prices at the pump. That is why we have decided not to go ahead with the increase in fuel duty in the autumn. It is also right to look at the impact on public finances and at what is practical and workable. That is where the Conservative proposals repeatedly fall down.
	I now turn to what the impact of such a proposal would be not only on the public finances but on other tax and spending plans. The hon. Member for Runnymede and Weybridge claimed that the Budget forecasts would remain unchanged by the proposal. That claim is simply irresponsible. The proposal claims that windfalls from certain taxes would pay for the Conservatives' plans. Their figures take account of increased VAT from higher petrol prices and of higher North sea oil revenues, but they ignore the fact that fuel duty revenues are likely to fall, not increase, when petrol prices rise, as demand for fuel falls. They ignore the fact that people spending more on fuel will spend less elsewhere, reducing VAT revenues from elsewhere in the economy. They ignore factors such as production levels, capital and operating costs and the strength of sterling.

Stewart Hosie: rose

Philip Hammond: rose

Yvette Cooper: I have to choose between giving way to an hon. Member from the party that tabled the motion and giving way to one from the party that was really responsible for the original proposal. I give way first to the hon. Gentleman from the Scottish National party.

Stewart Hosie: The choice is difficult, I know. I want to bring the Minister back to what she just said about revenue falling as the price rises. Will she look at the Government's own figures from the Department for Business, Enterprise and Regulatory Reform? They show that during the first three quarters of 2007, there was a net rise in the fuel price and a massive rise in the diesel price. Notwithstanding the change from petrol to diesel, and that kind of stuff, the figures show that despite a rise in price from 92p a litre to 97p a litrea 5 per cent.-plus rise in nine months, more than twice the rate of inflationnet demand increased. I do not believe that the Minister's assertion is right.

Yvette Cooper: When prices rise, particularly the price of things such as fuel, there will be a series of different impacts. Some people may drive less or consume less fuel. Others will spend less on other things, because in the end their spending will be limited.

Philip Hammond: I am grateful to the right hon. Lady for giving way to me. The National Institute of Economic and Social Research report, on which our policy is based, assesses the net impact on Government revenues after taking into account all those factors. The people at the institute are not undergraduate economists; they understand the point that she is making and they have taken all those factors into account. Can the Minister say which independent research she is citing when she says that we are wrong, and that revenues will fall when oil prices rise?

Yvette Cooper: Let me tell the hon. Gentleman some of the factors that the National Institute of Economic and Social Research does not take into account in its analysis. It does not, for example, take into account factors such as production levels, capital and operating costs, or the strength of sterling, all of which impact on North sea oil revenues and all of which have meant that those revenues have increased by less than we might have expected in recent years, given the rising oil price. The institute ignores the fact that rising oil prices can, through utility bills as well as fuel bills, affect inflation. That, in turn, raises tax allowances, reducing revenues, and increases spending on benefits linked to inflation. It is also important to include the impact of higher oil prices on companies' profits, and therefore on the tax that they pay.
	Let me quote someone whom I could not remotely describe as a competitor for the institute. He said:
	To be fair to the Government, when the price of oil goes up, corporation tax profits tend to go down, so corporation tax goes down and they suffer in other ways.
	That was the hon. Gentleman's boss and party leader at the beginning of this month, before the Conservative party put forward its proposals. The Institute for Fiscal Studies has said:
	Taking all factors together, it is far from clear that there will be a net gain to the public finances from the higher oil price.
	Perhaps most significant of all is the fact that the model used by the National Institute of Economic and Social Research depends on all other things being equalwhereas in fact, there is not only an increase in world oil prices, but an increase in world food prices and a global credit crunch, and they are all taking place at the same time. All those things will have an impact on the public finances. In the face of a world slowdown, to take any one tax in isolation and claim that there is a windfall available to spend is economically illiterate, irresponsible or just disingenuous. The Conservatives' proposals would have already cost an extra 900 million since the Budget, and would mean an estimated extra cost of more than 2.5 billion, to be paid for by additional borrowing, public spending cuts or tax increases elsewhere. Yesterday morning, the shadow Chief Secretary's leader said that he would back our spending plans, cut stamp duty and introduce his fuel duty measures. In the space of a three-minute interview, he promised an extra 3 billion that he could not fund.

Philip Hammond: rose

Yvette Cooper: I will give way to the hon. Gentleman if he will tell us where that 3 billion would come from.

Philip Hammond: I might engage with the Chief Secretary on that when she has told me where the Crewe and Nantwich 2.7 billion came from.
	The right hon. Lady has changed tack in the past minute and a half, so I would like to be clear about her argument. Is she now conceding that an oil price increase taken in isolation, with a shock to the economic model, produces a net increase in Government revenues after taking into account all the effects across the economy?

Yvette Cooper: No; the hon. Gentleman is talking nonsense. We have always been clear that there will be increases in some taxes but reductions in revenue from others as a result of factors such as an oil price increase. For example, there will be increases in the amount that needs to be spent on benefits as a result of rising inflation, which is in itself linked to rising oil prices. In addition to those factors, there are other pressures on the economy that responsible Governments need to take seriously when they take decisions on the public finances.

Kenneth Clarke: rose

Yvette Cooper: I will give way once more, but I have done so many times and I want to make final progress towards the end of my speech.

Kenneth Clarke: Well, I will make one final effort. Does the Chief Secretary really think that a Minister addressing the House of Commons should go into such copious detail about the likely impact on revenues and the economy of an Opposition proposal but refuse to give any information at all about a decision announced by the Chancellor of the Exchequer this morning? Corrections to the last Budget have already cost more than 3 billion in estimated revenues, and the forecasts of revenues from corporation tax and elsewhere given at the last Budget are plainly over-optimistic when one sees where the economy is going. It is no good her saying that every time the Government have changed their mind in the past they have not given those details, and we have had to wait until November. Will she address the question of where we are with the Government finances, and whether the Chancellor is planning to raise other taxes, reduce public spending or simply allow public borrowing to let rip?

Yvette Cooper: The right hon. and learned Gentleman is long enough in the tooth and has been long enough in the Treasury to know that, as always, we set out the forecast for the public finances at the time of the Budget and at the time of the pre-Budget report. Unusually, we said when we announced the additional increase in tax allowances that we would increase borrowing this year to pay for it. It is right to do that, given the pressures that the economy is under. We therefore set that out, in contrast to the Conservatives, who repeatedly set out policies that would result in huge additional costs yet never tell us where those funds would come from. This is not merely about the 3 billion of additional costs that the right hon. Member for Witney (Mr. Cameron) mentioned in the Today programme interview. Little wonder that he also said that he could not rule out tax increases, as he knows that he would need them to pay for his fuel duty plans. The results of the Conservatives' Finance Bill votes alone would cost an extra 3 billion, but they never said how they would fund them. Their promises on Budget day would cost an extra 5.4 billion, but they never said how they would fund them. Their promises throughout the autumn would cost an extra 10 billion, but they never said how they would fund them. At the last election, they promised more than 35 billion in spending increases and tax cuts, but never said how they would fund that.
	The Conservative motion is simply a con. Far from helping hard-pressed families, all that the Conservatives would do is push up their taxes elsewhere. Far from facing up to the serious problems of rising world food prices, they simply hide behind gimmicks, which would risk destabilising the public finances and the economy. Once again, we get showmanship, not substance. That is not what families or the economy need. That is why we should reject the motion.

Vincent Cable: I welcome the debate, partly because it gives us an opportunity to reflect on the statement that the Government made this morning. I do not know whether the decision was made because of the by-election or because of general political panic, but it was not a coherent policy statement and it does not give us key information, as the right hon. and learned Member for Rushcliffe (Mr. Clarke) pointed out.
	The debate also gives us an opportunity to review the SNP-Conservative proposalwe should call it the Salmond-Osborne plan and give credit for authorship where it is due. I remember that several years ago, before the hon. Member for Dundee, East (Stewart Hosie) came on the scene, the right hon. Member for Banff and Buchan (Mr. Salmond) set out the bones of the proposal. Although I do not necessarily agree with it, I want to award it proper authorship, and the Salmond comes before the Osborne in the description of the plan.
	There is some common ground in the debate: everyone accepts that higher fuel prices have caused hardship and that it would be desirable, if possible, to find some way of alleviating the impact on motorists.

Nigel Griffiths: rose

Alan Reid: rose

Vincent Cable: Let me finish my point and then I will take interventions.
	We are especially concerned about the impact on people in rural areas, particularly remote rural areas, who do not have the alternative of public transport. If there were an intervention at this stage to help to alleviate the burden and share the pain, a targeting method would be better, examining differential duties in remote rural and in urban areas.

Alan Reid: My hon. Friend has pre-empted my intervention. I support his comments that remote rural areas need a rural fuel discount. For example, the cost of unleaded petrol on Port Ellen on the Isle of Islay is 15p more than at Glasgow airport. That shows the effect of the higher cost of fuel on the islands and the damaging effect on the economy. I am therefore pleased that my hon. Friend supports the rural fuel discount plan that we proposed on Report of the Finance Bill.

Vincent Cable: I thank my hon. Friend for that intervention and I am happy to take one from another remote rural areaEdinburgh, South.

Nigel Griffiths: The hon. Member and I have corresponded on the issue. Two years ago, the hon. Member for Argyll and Bute (Mr. Reid) called for a spending commitment to reduce tax on petrol and diesel in rural filling stations. He has long campaigned on that. The hon. Member for Twickenham (Dr. Cable) wrote back: Alan was not, of course, advancing official policy. We are certainly looking at the implications of the recent European derogation of petrol duty to see if we can adopt it as policy. In those two years, what conclusions has he reached?

Vincent Cable: We have found that the policy is feasible in practice and entirely sensible and right. My hon. Friend the Member for Argyll and Bute (Mr. Reid) is right to have persisted with the matter. It can be financed by cross-subsidy or a small subsidy in relation to the sums of money that we are discussing today. I therefore endorse the policy, on which we have voted.
	Let me try to work systematically through the Conservative motion. It gets off to a slightly odd start because it states that diesel duties in the UK are higher than anywhere else in Europe. First, that is not trueNorway has higher diesel duties, but that is by the by.

Stewart Hosie: What about Germany?

Vincent Cable: Let me finish the argument and then I will take an intervention. It is odd that the hon. Member for Runnymede and Weybridge (Mr. Hammond) spoke for half an hour but did not deal with the practical problems that arise from the fact that the UK has exceptionally high diesel duty. There is a policy problem because we know that large-scale tax arbitragein other words, smugglingtakes place, and there are practical proposals to deal with that, whether through the original Britdisc scheme or some cruder system of taxing European vehicles at the points of entry and exit to account for road use. We should be discussing that because there is a genuine problem in that the current policyor lack thereofresults in a substantial leakage of revenue. It is a pity that we did not go further into the subject of diesel.

Sammy Wilson: Does the hon. Gentleman recognise that the leakage to which he refers is particularly severe in Northern Ireland, because of the differences in duty between the Irish Republic and Northern Ireland? Indeed, those differences have led to large-scale operations by gangsters, who take hundreds of millions of pounds out of the economy every year through fuel smuggling.

Vincent Cable: Yes, I realise that Northern Ireland has special problems because it has a land border. Any system to counteract smuggling is bound to face difficulties because of the small rural roads that exist across Northern Ireland. None the less, we need to stop that large leakage of revenue, which also does great damage to the British road haulage industry.

Robert Smith: My hon. Friend mentioned the Britdisc, which the Government abandoned. Does he think that road pricing for hauliers would be one way of ensuring that foreign lorries paid the same as lorries from this country and removing unfair competition from overseas lorries, which currently rely on cheaper fuel to take trade away from British hauliers?

Vincent Cable: That would be one way. Another way would be to check mileage at the points of entry and exit, and to charge a duty accordingly. There are various ways of dealing with the problem; I am simply surprised that we did not deal with it in the earlier exchange.
	The other odd thing about the motion is that it singles out diesel, because of the exceptional rate of British duty. Given that this debate has been overwhelmingly about petrol, I am surprised that there have been no references to differential rates in petrol. As it happens, Britain has, I think, the eighth highest petrol dutiesit is mid-table, according to the Automobile Association. Germany, Belgium and Italy have higher petrol duty than the UK, as a result of the various postponements to which the Ministers referred. By far the highest rate is that in Norway.
	Norway is an interesting example. The Conservative spokesman said that Britain was in the unique position of being an oil producer that also consumed a great deal of oil. Britain is not unique, because there is another European country with those characteristics. There is a question to be asked of the Norwegians, but to which I do not know the answerperhaps we should have a charter flight to Norway with the SNP and the Conservatives; I would be happy to go as an observeras to why they do that. I suspect that one of the reasons is that the Norwegians are conscious, in a way that we perhaps are notand as the Conservatives certainly are notthat oil is a valuable resource that needs to be conserved. The Norwegians use their tax policy to that end. We should therefore perhaps not be too flippant in dismissing that important history.

Rob Marris: In defence of the hon. Member for Runnymede and Weybridge (Mr. Hammond), I listened to him very carefully, and he said that we were in an almost unique position. I have spent a number of years in Canada, and it strikes me that, as well as Norway, to which the hon. Gentleman is referring, Canada is a major oil producer and a major western country. Indeed, it is a member of the G7. That is one of the reasons why I asked the hon. Member for Runnymede and Weybridge whether he was aware of any other country that had introduced a so-called stabiliser.

Vincent Cable: Indeed, Canada is another country that is both conscious of the environmental impacts and the need to conserve its valuable resources.

Philip Hammond: I am delighted and grateful that the hon. Member for Wolverhampton, South-West (Rob Marris) sprang to my defence. I made the reference twice: on the first occasion I referred to Britain being unique among EU countries, and on the second occasion I said it was almost unique among industrialised countries. From the comments that the hon. Gentleman has just made, it appears that he thinks the policy proposal that we have put forward applies only to petrol. It applies to fuelit applies to diesel, as well as to petrol. I want to be absolutely clear about that.

Vincent Cable: That is very helpful. I thank the hon. Gentleman for that clarification and I acknowledge his point. The motion does not deal with differential rates; in fact, I think it would make that problem rather more complicated. None the less, I take his point and I am sure that it has been noted.
	Let me move on to a second point in the Conservatives' motion, which accuses the Government of dithering. They obviously like that word, because we keep hearing itI know that it rhymes with wuthering, which makes quite a good joke. However, if I were trying to develop a serious critique of Government tax policy, I am not sure that dithering is the word that I would use. After all, the main criticism is not that the Government have dithered, but that they keep rushing in with not very well thought out proposalscapital gains tax, non-dom tax and inheritance tax come to mind. Dithering is perhaps not the proper criticism.
	Perhaps, however, I could make a case for dithering. There is an argument for dithering in a case such as this. We do not know what the oil price will be in the autumn, and we have no idea what the revenue position will be. It has been rather embarrassingly exposed that the Government have not even made any preliminary estimates of that. Surely it would be sensible to wait until the autumn before rushing into a decision on fuel duty

Philip Hammond: There is a by-election.

Vincent Cable: Indeed there is a by-election.
	There is a sensible economic case, if not a political one, for waiting and not rushing into this decision. As I understand it, the problem has arisen entirely because of the way the Government have subordinated their tax policy to our rather peculiar definitions of recess. They have had to make their announcement now because they had committed themselves to a policy change on 1 October. Had they said in the spring Budget that the decision would be made in mid-October, we would not have had this problem and the Government would have given themselves the freedom to make a much more considered, balanced and sensible decision than the one that they have been rushed into.

Philip Hammond: On a point of information, the Prime Minister's spokesman said on the record a couple of weeks agoI have the quote somewhere among my papersthat there was no requirement for an announcement on the postponement of the duty increase to be made while Parliament was sitting, and indeed stated explicitly that such an announcement could be made during the parliamentary recess.

Vincent Cable: That is very helpful, because I have been taken to task for saying exactly that. I am glad to get a bit of support, for once, from that side.

Maria Miller: rose

Vincent Cable: I will take one more intervention, and then I will plough on.

Maria Miller: In telling the House why the Government might do better to dither, is the hon. Gentleman saying that the Liberals want to see the 2p tax rise happening in the autumn? Would he want businesses and families face to uncertainty over that tax rise throughout the summer?

Vincent Cable: I did not say that at all. I said I would very much like to wait and see what the position was in the autumn. If oil prices are indeed going through the roof andwho knows?if there is an invasion of Iran and prices are completely out of control, people will obviously expect the Government to take compassionate remedial action to protect households. That would be entirely understandable. However, oil prices might well go the other way. Nor do we know how serious the impact of the decision on Government revenue will be. I am not making an argument for pressing ahead with the decision today. All I am asking is that we get a considered judgment, when we know what the Government revenue position iswhich we do not at the moment.

Stewart Hosie: We do know that oil prices are going through the roof. We know that the price at the pump is going through the roof, with half the 35p rise last year happening between mid-April and mid-June. We also know that many of the hauliers who were here protesting two weeks ago told us that they will not be in business by the time of the pre-Budget statement. I believe in evidence-based policy making, and surely we now have enough evidence to say that the Government should have not only postponed the 2p rise but introduced measures to help people much earlier than they have done.

Vincent Cable: I am all for introducing measures to help if they are practical and affordable. However, I think the hon. Gentleman's view of the oil market, which I know he has thought about, is based on the assumption that there is a spike, and that we need to deal with spikes. That might be true; I do not know. Certainly, my years in the oil industry have led me to believe that these things are very difficult to predict. I am therefore not as comfortable as he is that this is simply a temporary spike that needs to be dealt with on that basis. However, I totally accept his point that there is hardship and that road hauliers have a genuine problem, and of course we need to consider measures to help them, which is why we have focused on rural areas.
	As I have had various helpful interventions from the Conservatives, I shall now turn to their own proposals and the consultative document that they have put forward. This might produce some less friendly interventions. Underlying their proposal is an assumption that it would be sensible to pool oil revenues from one sector of the economy. Their basic underlying idea is that we should have upstream oil windfall taxes and taxes on the product, and that these should be pooled and evened out. I do not understand why that should be the case. Other sectors of the economy have different streams of revenue that we would never dream of pooling in that way. For example, council tax is going up and stamp duty is going down, but we do not argue that we need a property tax regulator. It would be a strange economic arrangement if we were to have such a thing.

Philip Hammond: I think the hon. Gentleman is suggesting some philosophical or moral reason for linking the two, but I do not believe that at all. It is simply a practical observation that there is a linkage in that when oil prices are rising, the Government inevitably and necessarily achieve a windfallfrom corporate taxes, petroleum revenue tax, North sea production and so forth. It thus provides a pool of revenue that always rises when the international price of oil rises. That is what enables this offsetting mechanism to be introduced.

Vincent Cable: I am trying to be not philosophical but practical in asking why this should be pooled with other sources of oil revenue. One of the reasons I ask the question, which concerns the silo approach to taxation, is that a few weeks ago the hon. Gentleman's colleagues produced a paper on the cost of living that had a different silo and a different box, whereby environmental taxes went into something called a family fund. There is a perfectly good reason for pairing the two, and we believe that environmental taxes should be offset with income tax. Three weeks ago, we heard the argument that green taxes, including taxes on fuel, should be put into a box and offset against income tax, but now we hear the argument that they should be put in a separate box and offset against upstream oil tax. Quite where this comes fromother than the fact that it makes a neat fit at a particular point in timeis difficult to say.
	Let us pursue the Conservative argument. The case is that there is a real windfall of revenue from the upstream oil sector. The Conservatives may well be right: we heard the argument last week; they have gone through a model and it is creditable that they have done their homework to that extent. The Government have a different model and have reached a different outcome, and they should perhaps tell us what it is and publish it. I am willing to accept, however, that the hon. Member for Runnymede and Weybridge may be right and that the Conservative model is better than the Government's model. I do not know, but let us assume for the moment that it is and that there is a real windfall here. If we really have a windfall from North sea oil revenue, the question that arises is what is the most sensible way of using it.
	Over the past few weeks, I have been going round the media studios, following or leading the hon. Member for Runnymede and Weybridge. Whenever I listen to his interviews, I always hear his phrase about a hole in the roof. If there is such a hole in the Government finances, surely that should be the first priority for any windfall gains. That is what most oil-producing countries would do: if they have a windfall in oil revenue from their upstream producers, they put it into a separate sterilised fund in order to stabilise public finances. Surely that is what is required. It should be used either to reduce Government borrowing this year or to pay off Government debt. Either the Conservatives do not believe their own propaganda about holes in the roof or they are not taking it very seriously.

Philip Hammond: But surely the hon. Gentleman would acknowledge that holes in the roof need to be fixed while the sun is shining. Surely he is not advocating pro-cyclical fiscal policy.

Vincent Cable: In terms of oil revenue, I would have thought that the sun was shining. Is that not the whole point? The sun is shining on the North sea, so should not any extra revenue be used to stabilise public finances? I find it difficult to understand why the Conservatives would not give priority to that. I am trying to be sympathetic and to understand their argument. They seem to be saying that fixing the hole in the roof has to wait because there is such pain about and families need to be helped. I understand that argument. They want to introduce some mechanism that spares the pain for families by ensuring that taxation reflects the deteriorating conditions in the economy.
	It is fair to say that a lot of taxation operates on that principle. Income tax goes down if incomes go down, with people moving to a lower income tax bracket. Stamp duty goes down if house prices go down, and people move into a lower bracket. The posh term for this is automatic stabilisers and I think that what the Conservatives are trying to do is to turn petrol duty into an automatic stabiliser. There is nothing fundamentally wrong with that, except that what happens with automatic stabilisers is that the revenue is much less predictable and that with a downturn in the economy, the deficits are much bigger.
	In the autumn, we will have a test of the sincerity of this conviction, as the Government are going to face the House with some truly awful deficit figures for this financial year. I am fully confident of that. The hon. Members for Runnymede and Weybridge and for Tatton (Mr. Osborne) might jump up and say, Well done, Government. You're applying your automatic stabilisers. Income tax revenue and petrol duty revenue are going down, and you're sharing the pain with the public, but somehow I do not think that that will happen. I think we will get a lecture on financial discipline, lack of control and excessive borrowing requirements. We will wait and see how that argument develops.
	I have read the Conservatives' paper, but I may have misunderstood it as it is complicated. They make certain assumptions about the oil price. The hon. Member for Runnymede and Weybridge corrected me a few moments ago, as I had understood them to be saying that they take a price, which happens to be the price that the Government assume in their pre-Budget forecast, and if the price rises above that level, duty is reduced; and if it falls below it, duty is increased. That produces a revenue-neutral process. It is based on the assumption that oil prices go in cycles. We know that that is probably not the case, and that is what worries me about the proposals.
	We have no idea what will happen to oil prices in the course of the year. Just notionally, I got one of my team to run the Conservative proposals through a little computer model to work out what the impact would be if, later this year, the oil price reached $200 a barrel. I am happy to pat that across as part of the Conservatives' consultation exercise. Effectively, they would be running a deficit of 10 billion a year on that aspect of their policies. The assumptions that one makes about the base oil price are fundamental to the revenue projections that the Government assume. The Conservatives might stabilise the impact on families, up to a point, but the proposals would import to the tax system a great deal of revenue instability.

Philip Hammond: I have had an exchange of notes with the hon. Member for Wolverhampton, South-West on exactly the same point while the hon. Gentleman has been speaking. He appears to be under the impression that the offsetting factor is the increase in duty in the future when oil prices go down, but the offsetting factor is the increase in Government revenues in the same time segment as a result of high market oil prices, which enable the Government to offset a decrease in fuel duty at the pumpsnot between one period and another, but in the same period.

Vincent Cable: I thank the hon. Gentleman for the clarification. I may have misunderstood as a result of trying to reverse-engineer what the Conservatives are proposing, but I think that what he is now suggesting meets my objection. However, it creates an entirely different problem: petrol duty would have to be set in response to the predictions of the economic model in relation to the net windfall, which is an even more complicated exercise. May I suggest that there might not be any net windfall at all? The proposal would make tax policy unbelievably complicated and unpredictable, and in view of the Conservatives' long-term commitment to tax simplification I am surprised that they are proceeding with it with such enthusiasm.

Pete Wishart: We know that the hon. Gentleman does not like the idea of a regulator, a stabiliser or whatever. What would the Liberals do, therefore, to help the hard-pressed motorist? I do not know whether he has been to Glasgow, but the one thing that is consistent on the street is unhappiness with high fuel prices. Would the Liberals do anything about that?

Vincent Cable: I have indeed been to Glasgow and I spent the earlier part of my speech suggesting that there are measures that could be taken. I realise that Glasgow, East is not a remote rural areaI am particularly conscious of that, having lived in the citybut I suggest that we move to a more appropriate system of vehicle taxation. We have vehicle excise duty, which is a blunt way to tax motorists and bears little relation to environmental impact, and we have fuel duty. If we were able to move quickly to a road user pricing system that properly captured the environmental costs of congestion, that would be a much more attractive long-term option for people in Glasgow, East and everywhere else.

David Chaytor: On that very point, the hon. Gentleman has moved his party's policy along considerably in the past two weeks. Two weeks ago, he was opposing the graduated vehicle excise duty on the existing fleet but supporting it on new vehicles. Today, he is proposing abolishing it on new vehicles. As for using road pricing only on motorways and trunk roads, has he thought through the impact of congestion and pollution on all other roads in rural areas and in urban and suburban areas?

Vincent Cable: As we have the vehicle excise duty system, and parking charge systems in certain cities, it seems entirely sensible that an environmental component ought to be built in where possible. My colleagues and I are arguing that in the longer term we move over to a system that more accurately reflects pollution costs, congestion costs and road use. It is a question of time periods. Given that we have the VED system, I have been happy to defend, and have voted for, a wider differential on new vehicles.

David Chaytor: But surely that would not send the signals for demand reduction that my right hon. Friend the Chief Secretary mentioned earlier. For those who drive gas guzzlers, the signals that it sends are that as long as they stay off the motorways and trunk roads, they can drive as much as they want, in whatever vehicle they want, and the emissions of their vehicle are irrelevant. It is a blank cheque for Chelsea tractors in suburban areas.

Vincent Cable: In the longer term, a combination of road pricing and fuel duty will be needed. Essentially, however, one is taxing use, and those who drive vehicles that are prodigious consumers of fuels would pay relatively more.

Rob Marris: I want to draw the hon. Gentleman back to the motion and his critique of the Conservative proposals. Does it strike him, as it does me, that the proposals would be incredibly complex? Either we would have changing prices at the pumps every day, or we would be trying to predict what the price of oil might be in a week, a month or whatever the time frame was for the change due to the so-called stabilisation. Not only would it be a burden on business to keep adjusting to that, but motorists would start second-guessing, saying, I might not fill up my tank today; I'll fill it up tomorrow, because it might change again.
	That would throw out the modelling completely again. Is the system not far too complex?

Vincent Cable: To be fair, I had a long discussion with the SNP, and its argumentI do not know whether the Conservatives have carried it forwardis that the adjustment would be every six months. That is the proposal as I understand it. One criticism concerns how on earth the windfall would be worked out, given the complex modelling problem. But it is fair to say that the proposal is not to change the duty every day.
	Another aspect of the potential problems arising from an SNP-Conservative approach to oil taxation is that they have different agendas. If I understand Scottish nationalism sufficiently, it seems the idea is not to use oil revenues to keep down petrol prices in Runnymede, Tatton or Twickenham. I think that the scenario goes rather differently: some time in 2010, perhaps there is a change of Governmentwho knows?but there are not many Conservative MPs elected, and they say, There is no legitimacy; let's have a plebiscite. They vote to go their separate ways, and the revenue gets no further south than Edinburgh.
	The question of where the revenue goes is to be resolved. I suspect that the unfortunate consequence of borrowing a Scottish nationalist policy is that the Conservatives find that the windfall on which their economic policy is predicated might not exist in two years' time. I do not want to anticipate interesting scenarios about British politics; I will leave that to them.

Several hon. Members: rose

Mr. Deputy Speaker: Order. I remind the House that a 10-minute limit on Back-Bench speeches applies from now.

Stephen Ladyman: I enjoyed the speech of the hon. Member for Twickenham (Dr. Cable), who made some important points. I will return to a couple of them.
	One of the hon. Gentleman's points was particularly well made: those of us who feel that the way that motorists are taxed must change should ensure that we are not double accounting in relation to where the money comes from and goes to. If one revenue is to offset a tax, we must ensure that we are not offsetting in two different places. It is clear to me from the Conservatives' recent announcements that they are doing precisely that. As the hon. Gentleman pointed out, their family-friendly proposal is that fuel duties should be put into a pot to offset income tax and be treated as green taxes. However, they are also talking about offsetting those same revenues against motoring taxes. That is clearly double accounting and it does not stack up.
	I am not going to attack the principle of what the Conservatives propose because, as I said in an intervention, I proposed something similar in an article on the Progress website. I would claim that they have nicked my policy rather than that of the Scottish nationalists. However, whether it is the SNP's policy or my policy that has been stolen, the only added value that we have had from the Conservatives is that they spent the past three weeks with a thesaurus, coming up with a different word to describe the policy.

Philip Hammond: I am not sure to what extent it applies to the hon. Gentleman's policy, but it certainly applies to the SNP policy, now that I have had a chance to read its proposal. Let me make it clear: the problem is that it relied on the concept of a windfall from VAT. I acknowledged in response to an earlier intervention that there is, broadly speaking, no windfall from VAT.

Stephen Ladyman: I agree. I do not think that a fuel duty moderator can work if all we are talking about is offsetting VAT increases. We have to look at the whole package of revenues and taxes that motorists are paying if it is to make sense.

Stewart Hosie: For the avoidance of doubt, while the value of the offset was the element of the increase that was accounted for by VAT, I made it perfectly clear in my speech two weeks ago that we were talking about the North sea windfall, which was confirmed in the letter from the Chancellor to my right hon. Friend the Member for Banff and Buchan (Mr. Salmond) only a week before that.

Stephen Ladyman: I am grateful to the hon. Gentleman for clarifying that. If this sort of fuel duty moderator is to work, it has to cover the whole package of revenues for which the Government have to account.
	My right hon. Friend the Chief Secretary and her boss the Chancellor have a far more difficult job to do than the Opposition suggest. They have to be responsible for ensuring that there is no black hole in our revenues and that all the Government's spending commitments are fully funded. I point out to the hon. Member for Runnymede and Weybridge (Mr. Hammond) that the Conservatives have a proposal whereby they will stick by our total spending plans. They are not committed to spending the money in the same way, but they are committed to spending the same amount, which means that they also have to be committed to raising the same amount. They cannot offer tax cuts here and there without creating a black hole in their spending plans.
	The criticism I would make of the Conservative proposal is that I do not think that the Conservatives have looked at the totality of the package of changes that would have to be made, and I modestly suggest that I tried to do that in my article. Several different changes would have to be made to achieve the green agenda of the Government and other changes. The inspiration for my article came from some of the think tanks that I believe the hon. Gentleman mentioned. I do not believe that what I call the fuel duty moderator was a novel idea. Other people have thought about it as well.
	What I would say to the House is that we already have a fuel duty moderator. We have seen it work today. It is called the Chancellor's judgment. What he does every so often, and what the two Chancellors have done 11 times since 1997, is to look at the net revenues coming in and the pain or otherwise being felt in the economy and make a judgment about whether fuel duty is going to go up or not. What Chancellors do when they make that judgment is look back at the levels of revenue that the Government are receiving from all the different sources and all the complexities of the economywhether the money is coming from VAT, North sea oil revenue, corporation tax, income tax or all the other things that are happening in the economy at the same time. They then make a judgment on whether the country can afford, or needs, a fuel duty rise. They have made that judgment today, so we can have a fuel duty moderator, but I would not necessarily recommend a formulaic fuel duty moderator such as the one proposed by the Conservatives.
	I had not appreciated that the Conservatives were suggesting that their calculation would be made only every six months. My view was that the Chancellor should make a judgment about once every quarter, and should then compare his revenue stream at that point with the predictions in his Budget. If the revenue stream is in excess of his predictions, he should be able to make a change in fuel duty. Why do I consider that necessary?

Jeremy Browne: Will the hon. Gentleman give way?

Stephen Ladyman: Let me make a little progress. One reason why I consider it necessary is that there are 23 million motorists out there who clearly feel that the net package of taxation that they are having to pay is unfair and, as a proportion of taxation as a whole, places too great a burden on their shoulders. I believe that we need to get those 23 million motorists on side with our green agenda, because otherwise we will never be able to drive down carbon emissions from fuel-powered transport. That is why I believe that we must put together a package of measures that will make motorists instinctively feel that the taxation system is a bit fairer than it is today.

Philip Hammond: I fear that the hon. Gentleman is falling into the trap that he wrongly accused me of falling into earlier. He suggests that the Chancellor could assess revenue outturns in what the hon. Member for Twickenham (Dr. Cable) describes as a silo. However, we have explicitly recognised that the impact will affect more than just oil revenues, which is what the National Institute of Economic and Social Research model suggests. The Chancellor will not be able to make his assessment quite as easily as the hon. Gentleman is suggesting.

Stephen Ladyman: What I am suggesting is that the Chancellor should look at the totality of the economy every three months and decide whether fuel duty could be changed. We have set out the rules.

Jeremy Browne: Will the hon. Gentleman give way?

Stephen Ladyman: I need to make a little progress. I have only four minutes left, and no more injury time.
	A critical aspect that has not been mentioned so far, although I think the hon. Member for Twickenham touched on it, is the freight industry. Although our petrol is far from the most expensive in EuropeI think we are now seventh or eighth on the listbecause we charge the same duty for diesel as for petrol, we have the highest diesel prices in Europe. People are coming into our country in lorries and stealing work from United Kingdom hauliers.
	According to a haulier who was involved in the fuel duty lobby the other week and whom I arranged to meet along with one of the Transport Ministers, between January and June 2007 the fuel bill for Les Knight Transport Ltd, which has a fleet of about 20 heavy goods vehicles, was 390,000. The bill for the same period this year was 484,000. That amounts to an increase of 94,000 so far this year. I asked how much of it the firm had been able to pass on to its customers. A fuel duty escalator is built into its contracts so that it can pass on some of the price, but so far it has only managed to get its customers to pay an extra 34,000. So far, 60,000 of extra cost has been imposed on the business in this year alone. No business could sustain that for long, and British hauliers will not be able to sustain it for long. I accept that that their social costs are lower, but we need to find a way of adjusting the balance on behalf of the haulage industry. Whether that is done through an essential user rebatewhich is what it is asking for, but which seems to me to be a rather complicated mechanismor a reduction in excise duty on heavy goods vehicles, we have to do something and do it fairly rapidly.
	I have been arguing that we should re-open the case for the vignette. The hon. Member for Twickenham suggested that we should just charge people coming into the country, but that would be against EU law. We would have to have a simple vignette system that everyoneBritish hauliers as well as foreign hauliershas to buy. A foreign haulier would, of course, buy it at the day rate, and the British haulier would buy it at a discounted annual rate, but what is important is that the revenue from that system would be used to offset UK excise duty on heavy goods vehicles. That would be a perfectly legal system under EU law, and it would be zero-cost to the Treasury and provide a considerable competitive rebalancing for the heavy goods vehicle industry.
	The Government were considering that idea. They decided not to look into it any further in the Budget, but that was before the current huge oil price rise. I suggest that one of the things my right hon. Friend the Chief Secretary could do is take that file out again and have another look at it with the eye of a politician, and see if it might provide her with the mechanism we need to make the UK HGV industry a bit more competitive.

John Howell: Thank you, Mr. Deputy Speaker, for giving me the opportunity to make my maiden speech. The pressure to make this speech at the earliest opportunity has come from some surprising sources. As I arrived here on my very first day, I was handed a telephone message from the local Oxfordshire press inquiring whether I had delivered it yet. Clearly, my predecessor's departure to be Mayor of London has liberated acres of column inches in my local papers that now need to be filled.
	For seven years, Boris Johnson served the people of the Henley constituency with distinction, dedication and considerable panache. There can be few people in public life so well known that a surname is superfluous, and few who have had such an enviable ability to relate to people from all walks of life. London is, indeed, fortunate, and the people of my constituency are proud of Boris's success and achievement. During the election campaign, it became apparent on the doorsteps just how much Boris had done as a constituency MP. For a man used always to being in the limelight, most of this had been done without fuss, but in the knowledge that it made a real contribution to the lives of the people of south Oxfordshire. People in one village in the constituency recalled Boris making a complicated journey from London simply to play a cameo role in the village panto. His ability to arrive late for almost all occasions must have presented particular challenges for the theatrical managementbut arrive on time he did, and he delivered his lines on cue. Incidentally, Boris's cameo role was playing Boris Johnsona role he had no trouble playing. Boris's ability to make politics and life fun are undeniable, but they should not obscure a man of great intellect and ability who will be much missed in the constituency and will be a hard act to follow.
	The Henley constituency occupies much of the area between Reading and Oxford and includes delightful and varied countryside from the Thames to the Chilterns. Its rural tranquillity is maintained by an almost complete absence of mobile telephone reception across large areas, which will no doubt prove a particular challenge for the Whips. Of course, many Members have recently had the chance to experience the constituency, and, I hope, to contribute to its local economy. Indeed, local estate agents are hoping that many will now come back permanently and that this will single-handedly buck any downturn in the property market.
	It is a constituency that has played a major role in English history. The abbey at Dorchester-on-Thames was once one of England's premier cathedrals. The town of Thame has managed to retain its market town character despite the pressures of growth, and Henley itself is, of course, famous for its regatta. However, it is one of the anomalies of constituency boundaries that when people attend the regatta they are actually in the constituency of my right hon. Friend the Member for Maidenhead (Mrs. May). The advantage of this is that it affords them a magnificent vantage point from which to look back into my constituency and the town itself.
	Even within this rural idyll, there are problems. Sandwiched between Oxford, Reading and Didcot, the constituency is constantly under pressure from overdevelopment, particularly in the green belt. Funding for any accompanying infrastructure has been difficult to access, and the situation has not been helped by the caricature of the constituency as too healthy and too wealthy. It contains areas of considerable deprivation, such as the village of Berinsfield and, indeed, parts of Henley itself, but it is typical of the public-spirited nature of those who live in the constituency that there are also thriving voluntary and charity sectors.
	The network of small rural villages scattered across the constituency illustrates well what the notion of community is all about. They provide the support and caring environment that has made it a joy to live there for 20 years and to have brought up my family there, but despite that, I remain concerned for the future because of the risk to all this from the increasing prospect of rural isolation caused by the steady erosion of local services.
	The final stop in this tour of my constituency is RAF Benson, which is one of the UK's main operational helicopter bases, whose staff are operating in both Iraq and Afghanistan. We must never forget that our military capability depends on the good will of service personnel and their families. Local commanders understand that, and I will have no hesitation in holding the Government to account on delivering the fair deal that service personnel and their families rightly require.
	May I turn briefly to the subject of the debate, about which I should like to make three short points? First, in his maiden speech, my predecessor said:
	many of my constituents find it very difficult to afford petrol these days.[ Official Report, 12 July 2001; Vol. 371, c. 1010.]
	He said that when the average price of a litre of unleaded was just about 80p. He went on to point out that there was no public transport alternative, with many villages having only one service per week. Seven years later, the situation is, in all senses, considerably worse in an area where the car is a necessity, not a luxury.
	Secondly, I shall not argue over whose by-election should take credit for the Government's climbdown over the 2p autumn rise. I think that my constituents would feel that they had a role to play in it, because they regarded their by-election as, in many ways, a referendum on the Government's whole approach to the motorist and will be glad to have forced the Government into that climbdown.
	Finally, if the Government find it hard to listen to us or to my constituents, perhaps they ought to listen to those who once would have been their natural allies. Last Friday, I returned to Oxfordshire county council, where, until recently, I held a portfolio that included human resources and its relationship to the unions. I was asked by the secretary of the Oxfordshire county branch of Unison to help draw to the attention of Treasury Ministers a 2,000 signature petition that it had raised on fuel duty. I was told that, for some reason, the union had been unable to find a Labour Member who was willing to do so. One can disagree with the detail of Unison's proposed mechanism to achieve the scrapping of the 2p increase and the further 10p reduction in fuel duty for which it is calling, but it is difficult to disagree with the sentiment it expresses: that pump prices are hurting businesses and individuals, particularly the poorest paid. I am pleased to have been elected to this House at a time when Conservatives are clearly trusted to represent the views of trade unionists, and I thank the House for its indulgence in listening to this speech.

Nigel Griffiths: One of the great pleasures of being Deputy Leader of the House of Commons was the enjoyment that I got from all the maiden speeches of colleagues who joined us in 2005. Many distinguished and impressive speeches were made, but none were more impressive than the maiden speech that we heard just now from the hon. Member for Henley (John Howell). He showed great wit, flashes of independencethe Whips will have noted those, so he will be up for a promotion very soona keen appreciation of the conventions of this House, which he has clearly quickly grasped, and, most important for his constituents, a good knowledge of the issues that face them. Clearly, they are going to have a champion in him.
	It is a great pleasure to speak in this debate, because I have rarely seen an Opposition motion so steeped in cant. The truth is that the people who led the charge to keep fuel duty high are on the Opposition Benches [ Interruption. ] The hon. Member for Runnymede and Weybridge (Mr. Hammond) says Come on!, but who brought in the fuel duty escalator? The last Conservative Chancellor. No wonder they lost. It is not Heathcliff who is responsible for the problem, but Rushcliffethe right hon. and learned Member for Rushcliffe (Mr. Clarke), who brought in the extra tax at the pump. Heathcliff abolished it. If the Tories had continued, about 30p would have been added through that tax to every litre, every day for the motorist filling up at the pump.
	In February, less than five months ago, when petrol was already more than 1 a litre and diesel was more than 1.10, the hon. Member for South Suffolk (Mr. Yeo), the Conservative Chairman of the Select Committee on Environmental Audit, criticised the Government for abolishing the fuel duty escalator. He was joined in that by his Conservative friends the hon. Members for Bexhill and Battle (Gregory Barker), for Ruislip-Northwood (Mr. Hurd), for Bridgwater (Mr. Liddell-Grainger) and for Beverley and Holderness (Mr. Stuart), but their demands for higher fuel taxes did not stop there. They called in paragraph 14 of the Committee's report for air tax freight duty to be introduced for the first time. That would send the cost of some foods through the roof.
	The Committee's fourth report of 2006-07 called for a sixfold increase in diesel for airport vehicles, when diesel cost 7.69p a litre. That would have sent up the cost to more than 46p a litre. The report produced in February went on to state that, by April 2009, fuel duties were set to go up by 6p a litre, but reminded the Committee and the House that fuel duty rates were still 11 per cent. below the price in 1999.

Philip Hammond: I do not quite know what the hon. Gentleman is rambling on about now, but let us get back to his criticism of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). Will the hon. Gentleman remind the House what the price of a barrel of oil was when my right hon. and learned Friend introduced the fuel duty escalator?

Nigel Griffiths: It was less than it is now, but as the price went up the Conservatives kept the escalator going. That would, of course, have meant that prices now would have been some 30p more than they are at the pump and up to about 1.50 a litre, according to the figures that I mentioned earlier, which were provided by the Automobile Association. The Committee's report is proof that the Conservatives have not learned a lesson about the fuel escalator. When the five Conservative Members I mentioned signed up to the report, which called for the Government not to back down on the rates of duty, they said that that would be a test for the Treasury. The report states:
	Some motoring organisations have begun calling for the next planned increase in fuel duty to be scrapped, given the rise in petrol prices due to increases in the price of crude oil. The forthcoming Budget is a test of the Treasury's environmental credibility: it must not defer its planned rises in fuel duty.
	The problem, of course, was that even that was not enough for the Conservative report on green taxes produced by Zac Goldsmith and the right hon. Member for Suffolk, Coastal (Mr. Gummer). It proposed to push up the vehicle excise duty differential to 500. They wanted a new graduated purchase tax with a variable VAT rate that would see a combined tax of 27.5 per cent. on larger cars. That was all aimed at hitting the motorist.

John Redwood: Why does not the hon. Gentleman refer to the report on economic policy that I chaired, which made it clear that we needed lower taxes on the haulage industry to avoid driving it out of business?

Nigel Griffiths: That is because the modern Tory party has abandoned the sort of principles that the right hon. Member espoused. It says one thing to one group, but allows the right hon. Member for Suffolk, Coastal to say another thing to another group.
	In the same way, the Leader of the Opposition tries to curry favour by telling Friends of the Earth and Greenpeace what they want to hear, before he goes along to the motor manufacturers and the road lobby to tell them what they want to hear. That is the sort of U-turn that he does: one day it is hug a hoodie, then it is hug a tree, and now it is hug a Hummer. The Opposition cannot make their minds up about whether they are going to be environmental or not, although I pay tribute to the right hon. Member for Wokingham (Mr. Redwood) for his consistency at least.
	The problem is that when the cold economic winds blow across the Atlantic and reach Britain and the Leader of the Opposition, the shiver looks in vain for a spine to run down. People want action, not unbelievable and untried policies from an Opposition Front-Bench team that clearly has not bothered even to look at the fuel tax stabiliser in other countries, given that it appears that all of them have rejected the measure as being pie in the sky. What the public want are practical steps such as the action that we have taken today.

Philip Hammond: Does the hon. Gentleman accept that a fuel duty stabiliser along the lines that we have set out would work only in a country that was both industrialised and an oil producer? There are relatively few candidates available.

Nigel Griffiths: I shall tell the hon. Gentleman how it would work, if it would work at all, and that is if the oil price continues its reduction of the past few days. The hon. Member hopes that that will happen, but he failed to tell the House about what would happen if it keeps going upand there have been predictions, and not just from the doom merchants, that it will rise inexorably and hit $200 a barrel. If the oil price continues to rise, what mechanism will ensure that people and motorists are weaned off the so-called stabiliser? If oil prices do not fall but keep rising, the stabiliser would have to be removed and fuel prices would rise. The stabiliser does not offer a long-term solution to the problem.

Philip Hammond: Will the hon. Gentleman give way?

Nigel Griffiths: No, as I am afraid I shall be in injury time if I give way again.
	The country wants a credible alternative to the stabiliser. The Opposition are offering something that no Government in the advanced industrial world, or indeed anywhere, have proposed. As my hon. Friends have pointed out, other countries are in the same position as Britain, being oil producers with advanced industrial economies. That is why the public will reject this gimmick from the Opposition. They clearly did not have sufficient confidence in it to test it in the Finance Bill Committee where, if it had not been debated to destruction, it would certainly have been thrashed around. To its credit, the Scottish National party allowed the policy to be tested. It was not adopted, but it has been partially stolen.
	However, the nationalists have their own problems with fuel. Some months ago, my right hon. Friend the Chancellor set aside a sum of money for England and the devolved regions to ensure that bus companies could offset some of the fuel rises and duties and keep fares frozen. The Scottish National party Administration in Edinburgh did not pass the money on to local bus companies, with the result that very successful companies such as Lothian Buses and others up and down Scotland were forced to put fares up by 10 per cent. That is a direct result of the Scottish National party talking up its concern about fuel, but in fact pocketing the money that had been set aside and using it for something else. As a result, my constituents and other people all over Scotland, including in Dundee, have suffered increased bus fares.
	People want the Government to take the sort of practical step that I have described. This Government set money aside, and it is a pity that it was not passed on by the Scottish Nationalist Administration in Edinburgh. However, the money was passed on elsewhere in the country, and it has helped to keep fares down, even at a time when diesel prices have escalated as the world price of oil has soared.
	Today's decision by the Chancellor to defer the 2p fuel duty rise will be widely welcomed. However, it is important that we send the clear, not mixed, message that things will not get easier as regards fuel. My right hon. Friend the Prime Minister has rightly pressed at summits to ensure that oil production is increased, but we all know that if Chinaa rapidly advancing, industrialising countrystarted to use oil at the same per capita rate as the United States of America, the entire world's current annual output would be consumed solely by China.
	It is right that we address issues of climate change and ensure that Americathe largest consumer of oilis part of that regime, recognises Kyoto, as it has started to do, and sets its own targets. We are not in a position to lecture the rest of the world unless we take steps in this country. I am very pleased that colleagues on my party's Front Bench have taken key steps on renewables. The measure that has been announced is necessary to bring some relief to hard-pressed motorists, and I welcome it. I am sure that they, too, will welcome it as a practical measure, and will reject the Opposition proposal as pie in the sky.

Maria Miller: It is a great honour to speak in the same debate as my hon. Friend the Member for Henley (John Howell). In his maiden speech, he showed his insight into his constituency. I visited his constituency just before his election and got to know it a little better, so I understand some of the glowing references that he made to villages in the constituency, and to the town of Henley, which is one of the most beautiful parts of south Oxfordshire. It is a great pleasure to have him here, although I think I speak for many Conservative Members, and perhaps a few Labour Members, when I say that we will miss his predecessor, who, in his role as Mayor of London, is doing great things. However, we will miss his charm and wit in this place.
	I am pleased to take part in this debate. It is clear that we are in a period of great economic uncertainty, and the situation is somewhat exacerbated by the recent massive fuel price increases. As a result of the Prime Minister's recent attendance at a meeting of the Organisation of Petroleum Exporting Countries in June, he is aware that it is unlikely that there will be any significant increase in oil supply in the next few years. That is why I found the comments of the hon. Member for Twickenham (Dr. Cable) interesting; he seemed, rather optimistically, to think that there might be changes in oil prices over the summer. I think that he may be looking at the world through rather rose-tinted spectacles, because as the Prime Minister said:
	This is the third great oil shock in three decades.
	All our constituents, across the country, see that first-hand when they go to the pumps to buy fuel and people in rural parts of my constituency, who still have to rely on oil to heat their homes, see that when the lorry turns up to fill up their tanks. We recognise that problem, and constituents will be grateful to us for calling this debate so that we can really press the Government on practical ways to support our constituents.
	The Government may say that they recognise the problem, but they are failing to show any of the leadership that we need to find a solution, and are failing to give business certainty; that is what people are crying out for. I am not sure that a six-month delay in implementing the 2p fuel rise will do anything to create the long-term certainty that families and businesses need on fuel costs. Let us consider the intricacies of the 2p delay. The cost of deferring the increase last time was about 550 million. We know that, as a result of the increase in fuel prices, the Government received in the first five months of this year alone a windfall that yielded almost that amount of money. Perhaps we could consider the issue in that context. As the Royal Automobile Club reminds us in its briefing, which sets out its reaction to the Government's announcement, the measure is just a drop in the ocean, given the 2 billion extra that the Treasury intends to take from motorists in the next two years.
	I am very concerned about families across the country, who face the reality of increasing mortgage rates and food prices, as well as ever-increasing fuel prices. That is the case not just in the rural areas of my constituency, but in the town, where we have great problems sustaining the public transport networks that are needed if people are to rely on them rather than their cars. The Government should be listening a little more intently to some of the proposals of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond).
	I particularly want to direct my remarks to business. Basingstoke has more than 60,000 jobs, of which almost 4,000 are in the transport and communications sector, and almost 8,000 are in manufacturing, so the cost of fuel matters to businesses in Basingstoke, which is one of the top 10 areas of employment in the south-east of England. It makes a lot of money for the Government and they need to listen harder to businesses such as those in my constituency. Visiting and talking to people who are running businesses day in and day out in this economic climate might bring home the reality of some of the Government's policies.
	On Friday, I was in a plastics manufacturer in my constituency, Holloid Plastics, which has been operating for more than 50 years. It is having to consider not just an annual price rise, but six-monthly price rises to try to keep on top of the fuel increases that it is having to endure. A delegation of local road hauliers recently came to the House and I was pleased to meet Mrs. Sandra Hunt and Miss Sarah Hunt. They are from L. Hunt and Sons Ltd, which has been in my constituency for more than 100 years, and they run a road haulage business out of Upton Grey that is enduring immense pressure as a result of the increases in fuel costs and that, again, has seen two price rises to its customers since April. Such price rises will be handed on not just to customers of road haulage companies but to their customers in turn, fuelling more of the inflation that we have seen in recent weeks and months.
	It is the Government's failure to grasp the scale of the problem that concerns businesses most, and perhaps in her closing remarks the Exchequer Secretary could show that she has been listening to the concerns of businesses and families today by showing that she will consider some of the practical measures that have been put forward by my hon. Friends. The country really needs certainty and fairness when it comes to the future in this area. We have the highest diesel costs in the EU, and that is a result of the level of taxation, and that has been so for more than a decade now. Particularly concerning is the fact that the gap between the UK and other EU countries has increased markedly since the late 1990s. The UK duty rate has been increasing much faster than elsewhere and that is of particular concern.
	I welcome proposals of my hon. Friend the Member for Runnymede and Weybridge on the fair fuel stabiliser, for which local businesses in my area have been calling directly. The Conservative party is taking on those issues and providing practical solutions in introducing the proposals for consultation. When fuel prices rise, we do not want to see the instability that the current situation is creating. The stabiliser could provide just the sort of solution that could help businesses to have a more stable and certain future. We cannot continue to lurch from one tax crisis to another, whether it is the 10p tax rate today or delaying a 2p tax rise for six months. As my hon. Friend said, this is simply no way to run our economy. I urge the Chancellor and his right hon. and hon. Friends to look more carefully at the fair fuel stabiliser as a way of providing the real long-term help that businesses in Basingstoke and throughout the country really need.

John Redwood: The issue before the House today is of consummate importance to businesses throughout the country and to our electors, so it is stunning to me that the Chief Secretary to the Treasury comes before the House and is unable to answer the simple question of by how much the pump price has gone up since the Budget as a result of the tax increases that the Government have imposed, or have allowed to be imposed by market movements, because some of the tax is ad valorem and some is fixed. We have a Chief Secretary who either does not know or will not tell us that very simple point of great interest to our constituents.
	Worse still, as my right hon. and hon. Friends pointed out when she was still with us, the Chief Secretary was unable to tell us what the loss of revenue would be from today's very wise decision to forgo the extra 2p that had been due in the autumn. The Government had been threatening us with that rise for so many weeks and months, despite all the evidence that they were collecting far more tax than they were planning for in the Budget forecast, and all the evidence of the damage that petrol prices were doing to our constituents around the country.
	It is surely not beyond the wit of the Prime Minister to find a Chief Secretary who knows how to do a few sums, and understands that she is paid a good salary to come to the House and tell us about the cost consequences of the Government's proposals. We would like to know how much extra revenue the Government are already getting from the windfall on North sea oil taxes as a result of the rise in the oil price, and from the windfall at the pumps that we have been describing.
	An external estimate says that the Government got more than 500 million extra in the first six weeks of the financial yearan absolutely massive sum. One assumes that the figure has been higher in each succeeding six-week period, because the oil price has risen that much further. We have at last gleaned from the Treasuryit has confirmedthat it did its forecasts at $84 a barrel. The price today is $139 a barrel, so we can all see that there must have been a huge increase in the tax that they have claimed. We should then ask who is having to pay all the additional tax that the Government are allowing to be imposed, or have deliberately imposed through their own positive decisions.
	We are back to the new Labour/old Labour story. The party seems to believe that only the rich should be allowed to drive, because the tax will bear disproportionately on those with older cars and lower incomes. We see much evidence around the country that families on low incomes in rural areas, or with work or school-run patterns that cannot be met by public transport, are under enormous pressure. Such families are in genuine fear of going to the filling station and filling up. They think about which other journeys they can cut out, or how they can adjust their lives in some way to try to deal with the weekly hit of an enormous fuel bill.
	It is those on the lowest incomes who will have to sacrifice journeys or sacrifice the car. People on high incomes such as ministerial incomes and betterthe lawyers and consultants whom the Government hirewill not find the situation that difficult. It may be slightly tricky for them, because they may have to cancel the extra glass of champagne, but it is not the end of the world. However, there are so many people for whom this means digging deep into their limited family budget, and being really afraid of what their Government are doing to them.
	We have learned in this debatethis was not challenged by the Chief Secretary, at leastthat at least 60 per cent. of the price at the pump goes to the Government. It may be more. It certainly is if North sea taxation is added; if we factored in the idea that the petrol we get at the pump is pumped via the North sea through a British refinery, the tax would be even higher. However, we can definitely concludeand the Exchequer Secretary will have to agreethat most of the money collected by the oil companies at the pump goes to the Chancellor. We can agree that the amounts are massively higher than was forecast in the Budget, and than they were last year. We must conclude that when it comes to higher petrol prices, the Government are undoubtedly the main villain of the piece.
	Families with difficult choices struggling on modest incomes are not the only casualties; another casualty is the British haulage industry. How many times have the official Opposition had to make the case in this House for British hauliers? How many times have the hauliers had to block the streets and undertake democratic protest because their Government are deaf and do not understand the point? Driving the British haulage industry out of business is not a green policy but a policy of the madhouse, because it will substitute foreign hauliers for British hauliers. Foreign hauliers do not pay the same taxes to own and run their lorries. They will bunker abroad. They will fuel up in Calais or the nearest port of departure from the continent and try to drive back to the continent with an almost empty tank so that they can refuel in a jurisdiction where the fuel is cheaper.

David Taylor: The right hon. Gentleman talks about the comparative costs of haulage in other European countries. Although he is right about fuel, he must factor in two other elements of the cost equation: first, that corporation taxes on the haulage companies are lower than in European countries; and secondly, that wage rates and suchlike are lower. Therefore, the overall cost of operation for companies in France, Holland and elsewhere is probably not substantially different from what it is here.

John Redwood: I think that the hon. Gentleman will find that as regards most of those cost areas there is an advantage to being on the continent, not in Britain.

Edward Timpson: Does my right hon. Friend agree that the situation is much more unsustainable for hauliers in this country? For example, the operations director of a transport company based in my constituency, who operates nearly 100 large goods vehicles, tells me that if the price of diesel remains at its current level, that will cost his company approximately 1 million per annum on top of what he is already paying, which works out at nearly 4,000 per working day. That is clearly unsustainable.

John Redwood: That is a good example of my general point. Anyone who knows the haulage industry knows that on many cost grounds, particularly all those related to Government conduct, we have a much worse deal in Britain. That is why we are losing business, why jobs are going, and why haulage companies are closing down. If Labour Members still do not know that, they are in for a rude awakening at the polls. It will be yet another example of their not understanding what is going on and not speaking up for the people in this trouble.
	The Chief Secretary to the Treasury and the other senior politicians in the Government seem to think that all this is a silly political game about black holes in public finances. I hope that I have illustrated that there is no black hole in this area of the accounts. There is a massive increase in revenue, and we are asking the Government to give a little bit of it away while oil prices are high, and at the same time have a stabiliser so that if the oil price plunges the Government will not be short of revenue, as they would otherwise be. Ministers do not even seem to be able to work out that if one charges an activity at 60 per cent. or more, and charges other activities at 40 per cent. or so, one will have more revenue if there is a rise in the price of the 60 per cent. tax item and less revenue if it falls. Anyone else can see that that must be true, because it is being taxed so much more highly than the other activity that it may be displacing to some extent when the price rises.
	The Government must learn how to do the sums. They must understand that if they gave a bit away now, it would do them a lot of political good, help the British economy, and do a little to ease the phenomenal squeeze that they have decided to place on the British consumer and the average voter out there. At the same time, by adopting the Conservative proposal, they could have some kind of insurance against the possibility that there is speculative money as well as underlying demand in the oil market, and that the price will come down. It is a very unusual market that always goes up, and it would be foolish of the Government to plan all their Budget assumptions on the basis that the price of oil will always go up now that it has reached about $140 a barrel; indeed, it has been a bit higher than that in recent trading.
	The black hole is the Government's black hole. If we are engaged in a debate about black holes, as the Chief Secretary says that we are, we would like to know exactly how much Northern Rock has cost them 5.3 billion so far, and rising. We would like to know how much all these tacky packages to try to win votes in by-elections have cost them. They are probably already overrunning by 10 billion, yet they have the gall to criticise the Opposition for coming forward with a very modest proposal that would make a small reduction in the part of the tax budget that is rising so colossally because of how the Government have set it up. Now that the Government have at last realised, long after everybody else, that they cannot go on with a 2p rise in the autumn, it is important that they should think again and take something off the already over-burdensome high taxes at the pump.
	I cannot remember such an intense squeeze on customers and consumers developing as quickly as is now happening as a result of the combined impact of the credit crunch and inflation. The inflation is occurring in the areas where the Government meddle most: in energy prices, where they have not allowed the permits to go ahead for an expansion of energy supply; in the oil products market, where they impose cripplingly high taxes and allow them to go up when the price is going up; and in food markets, where we have rigged prices thanks to the common agricultural policy and the Government's failure to get proper reform from our partners. We urge them to do themselves, as well as the country, a favour by seeing common sense and the need to cut those petrol prices immediately. That would reduce the retail prices index in the subsequent figures, which would help with other Government spending pressures because so much Government spending is linked to the RPI. Above all, it would help my constituents and the Minister's constituents, who have had it beyond belief with these price rises, and blame the Government for the petrol price rises because so much of that money is tax.

Stewart Hosie: I enjoyed the maiden speech of the hon. Member for Henley (John Howell). He is in the extraordinary position of having been a candidate with one policy and making his maiden speech with another. However, he has the advantage over all his Tory colleagues, in that the next time we vote on a fuel duty regulator, modulator or stabiliser, he can vote for it without the embarrassment of having not done so in the past. Having got that out of the way, I can say to the hon. Members for Putney (Justine Greening) and for Runnymede and Weybridge (Mr. Hammond) that they have done the right thing. They have fully considered the issues that affect 23 million motorists, the haulage sector and many others. They have clearly reached their own conclusions in their own time and developed a model for how their plan will work. However, it is fundamentally the same idea as many hon. Members have had.
	My comments are not about claiming the credit, even though I tabled an amendment on the subject to the Finance Bill in 2005, but about building a coalition of support to back all those in the real world and deliver a modulating, moderating or regulating impact to temper increases when prices spike. Many support that.
	Two weeks ago, when I tabled an amendment to the Finance Bill, I provided the context, so I will speak for only a few minutes; I want other hon. Members to be able to contribute to the debate. From 2005, when petrol was 86p a litre, the price has increased to an average of 1.32 a litre6 a gallon. In 2005 Brent crude had reached $60 a barrelalmost a 20 per cent. increase on the forecast for that year. Two weeks ago it was $132 a barrel, and yesterday the price reached $145 a barrel.
	I have also consistently said that the rises that we have experienced are inflationary. Yesterday the inflation figures were published, showing, at 3.8 per cent., a half point rise to almost double the Government's target. Fuel and energy prices have risen by 24 per cent. in the past year. We are considering essential items, and for those on low incomes and others, such as the haulage sector, real inflation far exceeds the Government's official figures.
	At 53.2 per cent., the UK has the highest tax take on a litre of diesel anywhere in the European Union. At 1.32 a litre for dieselit is dearer in many parts of remote and rural Scotlandit is 35p more expensive than it was a year ago. Almost half of that rise14phappened between mid-April and mid-June, according to the AA. That is precisely the sort of spike that a regulator, modulator or stabiliser is designed to smooth out. Only in Norway, with an average price of 137p a litre, is diesel dearer than in the UK. For normal people, that means that it costs 30 more a month to run one diesel car, or 46 more a month for a two-car family with petrol cars. People will need to earn nearly an extra 1,000 a year to pay for the increase in fuel that a two-car family will experience.
	It is important that fuel is regulated for all the reasons that I have outlined, but also to avoid the super-spike to $200 a barrel and more that Arjun Murti from Goldman Sachs predicted for this year. We must plan for those eventualities and have the mechanisms in place now, so that the Government do not rush around panicking when they happen.
	Let me briefly consider the Government's action today, suspending or abandoning the 2p rise in duty. Of course, it is welcomemany of us have called for it for some time. However, it should have happened months ago as prices began to spiral way above inflation and the Government's forecasts. That is why we need a regulator. The suspension should have been automatic, not based on any politician's whimand certainly not eight days before a by-election, although we in the Scottish National party claim credit for that.
	The most important point is not about 2p here or 2p there; it is about having in place the regulatoror we could call it the modulator, the stabiliser or the mechanismso that when the spiking occurs there are automatic corrections, and families and businesses can plan properly. In particular, that would mean that the haulage sector would not be crucified, and that, as we heard in the earlier example, modest companies would not have to find 60,000 net extra each year just to stand still.
	With that, I will leave it, except to say that although there will probably be technical disagreements with the Tories when the full detail of their proposals comes out, I am pleased that they have moved. I hope that I had something to do with that. If we continue to build up support among all the parties, we might be able to help a great many people with such a measure.

Alan Reid: As we have heard in this debate, the high price of fuel is having a severe effect on the economy throughout the country. However, it has a much more severe effect in remote rural areas than in urban areas.
	In my constituency, the effects are felt particularly severely on the islands and on the Kintyre peninsula, because fuel there is sold at a much higher price than in urban areas. That means that people suffer from a triple whammy: they pay higher fuel prices; there are no public transport alternatives; and they need to drive longer distances. Let me cite an example: on a recent visit to the remoter parts of my constituency, I found that the price at the pumps in Campbeltown, at the end of the Kintyre peninsula, was 6p a litre higher than at Glasgow airport and that at Port Ellen on Islay, fuel was selling at 15p a litre higher. On the smaller islands, the difference is always much greater.
	The Office of Fair Trading has on many occasions looked into the reasons for the high fuel prices in the highlands and islands. On each occasion, it has drawn the conclusion that the extra premium arises not from anti-competitive priceslocal filling stations are not ripping people off; there has never been any such accusationwhich can be dealt with through regulations, but from the way the market operates. In a small village, the number of pumps at the filling station and the turnover at each pump is less than one would find in an urban area. That means that the income required to cover costs is greater than that for urban filling stations.
	Another problem is that because remote filling stations are owner-operated, they are dependent on regional wholesalers for their fuel supplies, whereas urban filling stations usually have direct access to a supply of fuel without the need for the middle man of the wholesaler. Another problem that small filling stations face is finding the money for the fuel up front. Even a small island filling station will need to pay more than 10,000 up front to fill the tank. That is a lot for a small business to find up front, which leads to interest charges, and therefore additional costs. For islands, there is the additional cost of the ferry fare for both the tanker and the driver, and of the driver's wages for the time that it takes to make the delivery and return to base. For smaller islands, that can mean two or three full days simply for one delivery. That all adds to cost.
	One haulage company in my constituency pointed out to me earlier this week that it cannot get a discount fuel card that includes filling stations in Argyll. I was told that if it were operating in central Scotland, for example, there would be many fuel discount cards to choose from, with bulk-buying discounted rates. However, those rates do not apply in Argyll and Bute. All those costs add to the cost of both fuel at the pump and everything that is sold in the shops.
	We proposed an amendment to the Finance Bill on Report that would have achieved the end of higher prices at remote rural filling stations. We proposed a rural fuel duty discount, which operates in many other countries. Highlands and islands MPs recently held a constructive meeting with the Exchequer Secretary. She and other Treasury Ministers have certainly been sympathetic and have promised to examine the evidence. I have sent evidence to the Treasury and will soon send more. I urge the Government to examine this evidence very carefully and to produce a rural fuel duty discount scheme for islands and remote parts of the mainland before the high fuel prices work their way through to job losses.

Justine Greening: I guess that, first of all, I should pay tribute to my new hon. Friend, the Member for Henley (John Howell), for delivering such a fantastic maiden speech. I was a big fan of his predecessor, but I can see that I am going to be as big a fan of my hon. Friend. My only criticism of his maiden speech was that he definitely undersold the skills that he is bringing to the House in terms of his previous experience in business. Speaking as someone who also came into the House after working in industry and business, I am sure that he will be able to put those skills to good use on behalf of his constituents and his party, and I look forward to that happening.
	Today's debate gave the House an opportunity for what I hoped would be a constructive discussion on what the Government could do about the rising price of fuel. The Conservatives have proposed a fair fuel stabiliser, and businesses, green groups and the public will all have a chance to give us their thoughts during our consultation on this proposal over the coming months. However, we thought that it would be sensible to give Parliament the opportunity to consider our proposals as well. Unfortunately, the Government's attitude during this debate has been one not of positive engagement, but of relentless defeatism and, in my opinion, criticism for criticism's sake.
	As my hon. Friend the Member for Basingstoke (Mrs. Miller) and my right hon. Friend the Member for Wokingham (Mr. Redwood) mentioned, the issues that we are discussing today are real ones. The cost of livingparticularly the cost of transportis one of the most serious issues facing families and many businesses in Britain right now. My hon. Friend the Member for Basingstoke and my right hon. Friend the Member for Wokingham, as well as my hon. Friend the Member for Henley, said that these are particularly pressing issues for families, and especially for businesses, which cannot necessarily change their business procedures to avoid the kind of fuel price rises that we have seen in recent months. In the past year, we have seen a rapid rise in the price of petrol at the pumps. In September last year, a litre of petrol cost 95p; now, it is more than 1.19. Petrol price inflation in the UK is almost the highest in Europe, running at 17 per cent. In fact, it is second only to that of Estonia.
	These soaring costs are having a very real effect on families and businesses. The current rate of price inflation would have meant an increase of 185 a year in household fuel bills by the end of this year, which would put the average family's expenditure on fuel at more than 1,000 a year. As the hon. Member for Dundee, East (Stewart Hosie) pointed out, this is a real problem for businesses and families. It is a serious burden for both those groups, and the Government would have been wise to take it seriously, but they have not done so. It is a burden that the Government could do something about, but they will not. Other hon. Members have looked for ways to tackle these issues. We have heard the ideas of the hon. Members for South Thanet (Dr. Ladyman) and for Dundee, East. However, when tasked with helping people at a time of real and urgent need, the Government have offered nothing more than excuses and token gestures, when they really needed to take responsibility and offer real solutions.
	Somehow the public are meant to be grateful for today's announcement of a delay in the 2p rise. The Government are sending them a message, saying, Don't worry, we've decided not to make things worse for you. We're just going to keep things as bad as they already are, and you should be grateful for that. Frankly, that is typical of the Government's attitude so far. They are showing a shocking unwillingness to tackle the issue, saying, Don't blame us. What can we do? The line coming from the Governmentwe heard it again todayis that rising fuel prices are to do with the global price of oil and are therefore beyond the Government's control. When they finally take decisions on fuel duty, instead of introducing substantive policies to tackle the issue in the longer term, they give us policy by press release and policy by parliamentary question and answer. We all know we simply cannot go on running the public finances in that way. Everyone knows the bottom line: this is about Glasgow, East and the Government's and the Prime Minister's political survival. It is not about proposing a long-term fundamental approach to addressing oil price rises and their impact on the cost of fuel. Ministers need to start tackling those issues.
	What people want from the Government today is a helping hand to get them out of their financial troubles. Instead, what they see from the Government is no help at all. Far from providing a hand to pull them out of their troubles, the Government are pushing them further down into them. We heard nothing of value from the Chief Secretary today. The hon. Member for Edinburgh, South (Nigel Griffiths) did not have much to say by way of alternatives and was quite happy to back up all the platitudes that we heard from the Chief Secretary. Ministers need to stop being buffeted by events and actually get a grip on the situation.
	Our proposals are all about trying to find a way through these challenges for hard-pressed families and hard-pressed businesses. We believe that they will help families by stabilising their finances and we believe that they will help the public finances by helping to insulate them from oil price rises. We also think that they will have a welcome dampening effect on inflation. That has to be better than the sort of nudge and wink policy that we have had from Ministers today, as there is a sense that the Government's approach is unsustainable.

Alan Reid: Will the hon. Lady explain how long the gaps will be between now and the adjustments taking place? If they are too longsix months was mentionedthe Chancellor will effectively decide, and if they are too short, the proposals will have what has been described as a yo-yo effect.

Justine Greening: The hon. Gentleman raises a fair point. The reason for going through a consultation process is to ensure that, unlike with the Government's new policies on capital gains tax, non-doms and the 10p tax rate, we get things right first time. We have learned from the Government's mistakes, even if they have not.

Angela Eagle: The Tory document, under the heading Questions for consultation, asks
	how frequently changes in fuel duty should be applied... and how they should be calculated
	and it continues:
	Both oil prices and retail fuel prices are already monitored on a daily basis, so data collection is unlikely to pose significant challenges.
	That sounds like the yo-yo effect to me.

Justine Greening: Actually, it sounds like a response from a Treasury Minister who has no realistic alternative of her own. The reality is that the current situation requires action, not inaction, and it requires leadership rather than dithering. We have proposed this fair fuel stabiliser as a solution and we want to get it right first time. I would have hoped and expected that Government Ministers approached potential solutions to the impact of fuel prices on families with an open mind. Instead, when new ideas have been suggested, as today, they have simply been dismissed out of hand. In fact, Ministers have criticised other people's suggestions while offering no ideas of their own. They are struggling along on a day-by-day, by-election-after-by-election basis, desperately trying to provide the illusion of control. Frankly, it would be much better for families if they simply recognised a good idea when they have one put in front of them. They have done that on inheritance tax, capital gains tax and the 10p tax rate, so why not on road tax as well? Instead, they are putting their own political priorities ahead of what is right for the country.
	I realise that no Government like to appear out of touch or out of their depth, but I have to tell Ministers that the public know that that is exactly what is happening. We have already reached that point with the current ministerial team running the country. The public can see that the Treasury is failing to cope with the challenges they have to face every single day. They need Ministers to rise above political posturing and tackle the problem. Businesses are going under; families are facing sky-rocketing fuel bills; and oil price fluctuations are destabilising the wider economy. We offer a solution that would be good for the Government, good for the economy and, most important of all, good for the people of this country who are struggling to cope.
	I shall finish my contribution to this debate on fuel costs with a motoring analogy. We find ourselves with a Government and Ministers with so little direction that we feel inclined to give them a political sat-nav, but the problem is that they would not be able to put any political destination into it: half the Labour party would be shouting, Left, left! while the other half would be shouting, Right, right!, with no clue where to go next.
	Yet again today, we saw Labour MPsself-proclaimed representatives of low-income familiesjustifying the Government's plan to keep high taxes on those very same families and crowing about their Government not going ahead with tax rises, as if that were some sort of achievement or success. On three Wednesdays running, I have watched them vote against relieving the financial burden on those families. Those constituents and families will ask themselves why MPs have taken no action on road tax, no action on the cost of living and no action today on fuel duty.
	People will realise the answer to those problems: it is to get themselves a fresh Government with some fresh ideas who are willing to take a fresh approach to tackling the problems that our constituents face today and that need sorting out sooner rather than later.

Angela Eagle: This has been an interesting debate and I am grateful to all hon. Members who contributed to it. In particular, I want to pick out the maiden speech of the hon. Member for Henley (John Howell), which we all enjoyed. It was a privilege to witness his arrival in the House. He has some interesting acts to follow and he alluded to that. He also mentioned his immediate predecessor, but among his predecessors in Henley there is quite a tradition of exciting, interesting haircuts at least. We on the Labour Benches will be interested to see whether anything interesting happens to the hon. Gentleman's haircut as a result of filling certain shoes. I congratulate him on making his maiden speech, and wish him a happy and enjoyable time as a Member of Parliament.
	The hon. Member for Twickenham (Dr. Cable) made an interesting point when he asked why oil revenues should be pooled separately from other UK revenues. Why, uniquely, should oil revenues be pooled? The Conservative party needs to think about that. There is also the proposed green taxes pool, which would go into the family fund. One wonders where the Conservatives would collect their taxes to pay for general public expenditure. If they carry on like this, by the time we get to the next election they will have hypothecated the lot.
	We listened to the advocacy of some of those who have been talking about stabilisers, regulators, moderators and various other words from the thesaurus in relation to fuel balancing plans. My hon. Friend the Member for South Thanet (Dr. Ladyman), who also suggested that approach, at least said that there needs to be a package of measures for fairer treatment for motoristswe would agree with thatbut that we need to consider the totality of revenues, rather than particular pieces of revenue in isolation. We should all bear that in mind.
	My hon. Friend the Member for Edinburgh, South (Nigel Griffiths) spent some time quite accurately pointing out the many different faces of Conservative environmental policy, depending on where one looks and which audiences the Conservatives happen to be addressing at the time. Again, that is something we should be well aware of.
	The hon. Member for Dundee, East (Stewart Hosie), who is something of a pioneer in this respect, must be sat back enjoying the interest that his proposals are attracting and the ripples that they are causing across all the Opposition Benches. I congratulate him on that.
	The background to the debate is the rapid rises in petrol prices over recent weeks and months. Those rises have been caused by global forces, which have led to rising world oil prices. They are putting real pressure on many businesses and on many families' finances. The Government have recognised that, which is why my right hon. Friend the Chancellor deferred the planned 2p per litre fuel duty increase in April's Budget. It is why he decided to postpone the rise planned for October this year, too.
	By contrast, as my right hon. Friend the Chief Secretary demonstrated in her opening remarks, the Opposition have suggested a policy that would be a fuel duty destabiliser. It would achieve the very opposite of the things that they claim for it. Fuel duty is not the cause of the rapid petrol price rises of the past few months. Duty rates have not changed since October last year, yet fuel prices have risen 20 per cent., driven up by the near-doubling of the world oil price in the last year to record highs of more than $145 a barrel.
	It is worth reminding the House of our record as a Government. Since 1999, we have abolished the Tory fuel duty escalator. Fuel duty rates have gone up only three times, and are now 17 per cent. lower, taking account of inflation, than in 1999. Instead of the current level of 50.35p, if fuel duty had gone up in line with inflation it would now be 61p a litre. If the previous Conservative Government's policy of a fuel duty escalator had been continued, the tax on fuel would now be 79p a litre, which is nearly 30p a litre more than the current level. Therefore, we need take no lessons from the Conservative party about helping ordinary working people and businesses to cope with challenging economic circumstances.
	It was the last Conservative Prime Minister, when he was Chancellor, who said that if it is not hurting, it is not working. But we know that it is the legitimate role of Government to help people through turbulent economic times, and not just abandon them to market forces. It was the Leader of the Opposition, not any member of this Government, who recently made a speech blaming the poor and obese for their predicament, and denying that the state should have a legitimate role in helping them to overcome their problems. We, however, will continue to help people through challenging economic times.
	That brings me on to the policy proposals outlined recently by the Conservative party for a fuel duty destabiliser. My right hon. Friend the Chief Secretary has dealt in some detail with that suggestion. She rightly pointed out that the Tory fuel duty destabiliser relies on redistributing a fantasy tax windfallit simply does not exist, and cannot be redistributed to motorists or anyone else. The Tories' fuel duty destabiliser assumes an ability to forecast and define a fair oil pricethe phrase that they usewhen the reality is that any such figure would be completely arbitrary. The Tories' fuel duty destabiliser would cost 2 billion to 3 billion a year if duty rates were cut by 5p a litre as they suggest. There is no indication of where the money would come from.
	There is no guarantee, however, that cuts in fuel duty would translate into lower prices at the pump

John Redwood: Will the hon. Lady give way?

Angela Eagle: No; I have only two minutes left.
	Retailers would be likely to stop smoothing the impact of oil prices feeding through to petrol prices, as they tend to do at the moment. As well as being based on a non-existent windfall, the Opposition's proposal would make it incredibly difficult to forecast the public finances, given the notorious volatility of the world oil price.

Justine Greening: On the Government's policy, how much will the 2p delayed duty rise cost the Exchequer?

Angela Eagle: The Red Book figures demonstrate that the cost is 550 million.
	Since the beginning of this year, the oil price has varied between $146 and $86 a barrel. In one day alone, it increased by more than $10. Assuming that the Opposition's proposal would involve changing the fuel duty rate by 1p a litre for every $6, as they said, we would have had to change the fuel duty 25 times since the Budget 18 weeks ago. That is a ridiculous policy. Nor is there any guarantee that the duty reductions would be passed on in full to consumers.
	Now that the Tories have their press release out, they have many questions to answer about their fuel duty destabiliser. Is it a pledge? Is it policy or just warm words? I notice that they are consulting on it. Does that mean that they will quietly drop it when they hope no one is looking, or can we add another 2 billion to 3 billion to the black hole in their finances? If it is policy, why on earth did they not vote for new clause 4 in the Finance Bill on 15 May?

Andrew Robathan: rose  in place and claimed to move, That the Question be now put.
	 Question, That the Question be now put,  put and agreed to.

Question put accordingly, That the original words stand part of the Question:
	 The House divided: Ayes 175, Noes 340.

Question accordingly negatived.
	 Question, That the proposed words be there added,  put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.
	Mr. Deputy Speaker  declared the main Question, as amended, to be agreed to.
	 Resolved,
	That this House recognises the pressure that the increase in fuel prices, caused by pressures from the international oil market, has put on business and families; welcomes the Chancellor's decision to defer the planned two pence per litre increase in fuel duty that was due to take place in April 2008; notes that while fuel prices have increased by over 20 per cent. since last October, fuel duty has stayed constant; also notes that had the escalator introduced in 1993 been in place since 1999, fuel duty would now be 29 pence per litre higher; supports the Government's global leadership on this issue, in particular at the recent Jeddah Energy Meeting, and welcomes the Government's intention to host a follow up to this meeting in London later this year; further recognises that the Government does not receive a significant windfall when oil prices rise, because any additional revenues from the North Sea are likely to be offset by other effects; and therefore further notes that a system which would automatically cut fuel duty when oil prices rise would be destabilising, creating volatility for the public finances and uncertainty for the financing of public services, and would create considerable pressure for tax increases elsewhere.

BUSINESS OF THE HOUSE

Motion made, and Question put forthwith, pursuant to Standing Order No. 15 (Exempted business),
	That, at this day's sitting, Consideration of Lords Amendments to the Criminal Evidence (Witness Anonymity) Bill may be proceeded with, though opposed, until any hour. [Alison Seabeck.]
	 Question agreed to.

Criminal Evidence (Witness Anonymity) Bill

Lords amendments considered.

Clause 3
	  
	Applications

Lords amendment: No. 1.

Maria Eagle: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendment No. 2.

Maria Eagle: Lords amendment No. 1 is designed largely with the avoidance of doubt in mind. We wish to prevent unnecessary legal argument arising about the effect of the emergency legislation that will come into force on Royal Assent. The amendment puts beyond doubt that, even following the abolition of the common law in relation to such applications, the identity of witnesses can be withheld from the defence before and during the making of an application for a witness anonymity order.
	The amendment therefore makes it clear in the Bill that the party making the application is under no obligation to disclose the real identity of a witness to other parties at the application stage, with a saving for the disclosure of a defence witness's real identity to the prosecutor. In addition, where it is proposed that an order should be made, the amendment makes it clear that the identity of witnesses can be protected in the proceedings before the application is made, for example, during committal proceedings.
	Lords amendment No. 1 also addresses a question raised by amendments tabled in the other place. The issue is whether the court must always know the identity of the witness. In the vast majority of cases, it will do so, but very occasionally there may be national security-related cases where even the court will not know, and will not want to know, the identity of a witness. For that reason, the amendment does not include an absolute requirement to disclose the identity of the witness to the court. Rather, it grants the court a power to waive the disclosure to the court of the real identity of a witness on a case-by-case basis. We envisage that the real identity of a witness will be disclosed to the court in the vast majority of cases.
	Finally, Lords amendment No. 2 makes it clear that the power of the criminal procedure rule committee to set out further procedures relating to witness anonymity in criminal procedure rules is unaffected. It is likely that the rule committee will want to make specific rules, as soon as possible, to set out the mechanics of applications for these orders. Indeed, the committee is meeting on Friday, when it will be invited to discuss this very matter.

Edward Garnier: I shall begin by dealing with Lords amendment No. 2, in respect of which I simply ask the Minister to confirm that the rules bringing this procedure into effect will be made as quickly as possible. She mentioned that the committee will be sitting fairly soon. It is important, however, that despite the emergency nature of this legislation, the practitioners and courts see the rules as soon as possible.
	Amendment No. 1 provides us with an object lesson of what happens when one legislates without proper care and with a great deal of speed but without much consideration. Lord Hunt of Kings Heath, the Minister in the other place, spent about four of the five minutes of his speech apologising when he explained why the amendment was introduced at the last moment. He was right to do so. I notice that the Minister did not find it convenient to do it here, but I am sure that in the back of her mind was the need to apologise to this House for that late amendment.
	We do not want to press the matter to a Division, but we think that a degree of clarification is required at this late stage. First, what effect does the late Government amendment have on the prosecution's duty to give full disclosure in a criminal case? It is not clear from what the Minister said how or whether that duty is affected. Secondly, will she explain precisely what has been abolished in relation to the common law as it was thought to be until the House of Lords judgment on the Davis case?
	Clause 1(2) states:
	The common law rules relating to the power of a court to make an order for securing that the identity of a witness in criminal proceedings is withheld from the defendant (or, on a defence application, from other defendants) are abolished.
	Yet clause 5(2), which deals with relevant considerations that have to be taken into account before a court is satisfied that the conditions for making an order have been fulfilled, states in paragraph (a) that those considerations include
	the general right of a defendant in criminal proceedings to know the identity of a witness in the proceedings.
	Of course, that takes us back to the common law position. The Government need to explain, even at this late hour, what they intend by clause 1(2). Having said all that, I trust that the Minister is looking forward to her happy hols.

David Howarth: On amendment No. 2, I have nothing to add to what the hon. and learned Member for Harborough (Mr. Garnier) just said. However, I have a point to make and a question to ask about amendment No. 1. When we debated amendment No. 35 to clause 3(2) last week it became very clear that that clause was trying to cover too many different possible cases with too few rules.
	I welcome the fact that the new version of clause 3(2) provides more detailed provisions. I particularly welcome the addition of the obligation to disclose the identity of the proposed anonymous witness to the court. That is an important improvement. I also welcome the fact that the new version pays more attention to the procedure for making those orders. I am still very concerned about the lack of equal treatment between anonymous witnesses proposed by the defence and those proposed by the prosecution. Under the new version of clause 3(2), when the defence applies for a witness anonymity order, it still has to disclose the identity of that witness not only to the court but to the prosecution. That is not the case the other way around.
	When we debated the matter last week, the argument was made that the prosecution needed to know the identity of the witness in order to fulfil its duties, which were also mentioned by the hon. and learned Member for Harborough, of disclosure to other defendants in multiple defendant cases. The problem with that is that it is precisely in those cases that everyone is agreed that we do not want material that identifies the witness to go to the other defendants as it is usually the criminal associates of the other defendants who cause the trouble and the fear.
	In fact, the new version of clause 3(2) specifically states that there is no obligation on the defence to disclose to the other defendants material that might tend to identify. The problem is that if there is an obligation on the prosecution to disclose and the prosecution receives information that might tend to identify the witness, the prosecution might find itself obliged under the disclosure rules to disclose that information to the other defendants. The effect of that would be that what the Bill is attempting to ban directly might occur indirectly. I cannot find anything in the Criminal Procedure and Investigations Act 1996 that might prevent that, so there is a serious problem with how the Bill is worded.
	I still have a more fundamental problem with the imbalance between prosecution and defence. There is still a human rights problem, because article 6.3(d) of the European convention on human rights requires witnesses for the defence to be examined on the same basis as those for the prosecution. It was argued last week that the difference between the two sides is that the prosecution would know the previous convictions of a proposed witness and would put them to the court when the court was deciding whether to make an order. It was said that the same would not apply to the defence because it would not necessarily know the true picture of the defence witness's antecedents, and the Lord Chancellor made the point that people are not often entirely honest about previous convictions.
	The problem with that is that I am not entirely sure that the prosecution always puts a witness's previous convictions to the courtat least not under the previous, rather informal procedure. Secondly, when the court is faced with a decision about whether to grant an order, it knows that it will not have the same information about a defence witness as it does about a prosecution witness. Even if it does not know that, the court can be reminded by the prosecution that it does not have the same information that is available for a prosecution witness. The court can take that into account when deciding whether to grant an order.
	In any case, if the defence thinks that it might not get an order because it is not in the same position with regard to a witness's previous convictions, it can supply those previous convictions itself. It is an oddity of the Criminal Records Bureau legislation that people cannot undertake a CRB check on themselves, but that they can get around that by submitting a data protection request to the police national computer. It seems to me that it should be up to the defence to decide whether it wants that to happen.
	I am still not convinced of the underlying argument, especially as I believe that the proposal for an independent counsel offered a better route. I still think that that would solve more effectively the problems that I have set out. I have to say that I was rather disappointed by the House of Lords decision in respect of the independent counsel issue. The Conservative spokesperson said that he supported the idea

Mr. Deputy Speaker: Order. I think that the hon. Gentleman is dealing with amendments that have been defeated in the other place. They are not really things that we should be discussing this evening.

David Howarth: I accept that, Mr. Deputy Speaker, but my point was that a different aspect of the independent counsel proposal was raised twicefirst in connection with this amendment and specifically because it offered an alternative way of dealing with this problem, and then later by itself. I still think that it is relevant to say that I was disappointed by what happened in the other place, where the Conservative party was slightly feeble.
	Nevertheless, and even though we still disagree on the fundamental point about equality of treatment, I hope that the Minister will be able to answer the more specific question. Is it intended that it should be possible for sensitive information about identity to be released to other defendants in multiple defendant cases in the indirect way that I have described? The obvious intention of Lords amendment No. 1 is to stop that happening directly.

Maria Eagle: With the leave of the House, Mr. Deputy Speaker, I should like to answer the questions that have been raised.
	The hon. and learned Member for Harborough (Mr. Garnier) asked about the rules. I think that the fact that the rules committee is meeting on Friday indicates that it intends to move swiftly. We hope that the rules will be produced as soon as is practicable, commensurate with the consideration that the committee must give to what they should say. On his question about what precisely is being abolished, I draw his attention to  Hansard, where my noble Friend the Attorney-General made it clear that
	We are dealing only with the common law ability to grant anonymity orders, which the Judicial Committee said we cannot use, and we are substituting a statutory framework by way of the provision.[ Official Report, House of Lords, 15 July 2008; Vol. 703, c. 1107.]
	What is being abolished is not the ancient common-law right to confront one's accuser, but the system that had grown up in the court for creating anonymity orders. That is being replaced by the statute before us.

Edward Garnier: As the hon. Lady has been good enough to refer me to what the Attorney-General said in the other place, may I ask her to bear in mind the point made by the noble and learned Lord Lloyd of Berwick? He asked the Attorney-General:
	Does the noble and learned Baroness agree that, once the principle is established, the worst solution would be to have common-law rules and statutory rules running side by side? That always leads to confusion.[ Official Report, House of Lords, 15 July 2008; Vol. 703, c. 1108.]
	For the record, we need to be clear whether the Government accept the thrust of Lord Lloyd's suggestion.

Maria Eagle: Indeed, but I hope to be able to assure the hon. and learned Gentleman that what he suggests is not what is happening. The legislation before us, and any refinement of it in the forthcoming Bill, is about dealing with the rules for anonymity orders, for which a Judicial Committee of the House of Lords said that there was no common-law power. There will not be two sets of rules running in parallel. The legislation sets out the statutory rules for granting an anonymity order. I hope that that clarifies the matter.
	The hon. Member for Cambridge (David Howarth) made some esoteric points, if he does not mind me saying so. I enjoyed hearing a Liberal Democrat say that the Tories were being feeble.

David Heath: They always are.

Maria Eagle: They always are, apparently.
	Let me try to reassure the hon. Member for Cambridge, because he made an important point to which the hon. and learned Member for Harborough also alluded. Where the defendant has told the prosecutor of the witness's real identity for the purpose of making an application for a witness anonymity order under the Bill, the prosecutor will have to consider whether that material is potentially disclosable under the Criminal Procedure and Investigations Act 1996, which the hon. Member for Cambridge has clearly read this afternoon. Under section 3(6) of that Act, the prosecutor already has the power to make an application to the court to withhold such material if it is not in the public interest to disclose it. In practice, we expect that the courts will deal with any prosecutor's duty when it makes the determination in respect of the defendant's application for the witness anonymity order. In practice, over the next few months, we will be in a position to see how that works, and no doubt we will be able to take any action that needs to be taken in the light of that experience when we reconsider the legislation in proceedings on the Law Reform, Victims and Witnesses Bill. I think that I have dealt with the points raised, and I reiterate the fact that we support the Lords amendments.

Jack Straw: I think that these proceedings are about to conclude, so if I may detain the House for a second, I should like to put on record my thanks to the official Opposition and the Liberal Democrats, in both Houses, for the co-operation that we received, both in the Chambers and, as it were, behind the Chair. It was important to complete proceedings on the Bill as quickly as possible. It is the duty of the Opposition to oppose, but they have done so in a very constructive way, recognising the imperative to get the legislation through its stages. I also thank the officials in my Department and parliamentary counsel for all the work that they have undertaken in double-quick time.
	 Lords amendment agreed to.
	 Lords amendment No. 2 agreed to.

DELEGATED LEGISLATION

Madam Deputy Speaker: With the leave of the House, we shall take together motions 4 and 5.
	 Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Immigration

That the draft Immigration (Supply of Information to the Secretary of State for Immigration Purposes) Order 2008, which was laid before this House on 19th June, be approved.

Terms and Conditions of Employment

That the draft Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2008, which were laid before this House on 30th June, be approved. [Alison Seabeck.]
	 Question agreed to.

business of the House

Madam Deputy Speaker: With the leave of the House, we shall take together motions 6 and 7.
	 Ordered,
	That, at the sitting on Thursday 17th July, the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of the Prime Minister relating to the Intelligence and Security Committee not later than Six o'clock; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; the Questions may be put after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.
	 Ordered,
	That, at the sitting on Monday 21st July, notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on
	(1) the Motions in the name of Sir Peter Viggers relating to the Electoral Commission one hour after the commencement of proceedings on the first such Motion; and
	(2) the Motion in the name of Secretary Jack Straw relating to Data Protection and Freedom of Information one hour after the commencement of proceedings on that Motion;
	in each case proceedings may continue though opposed after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply. [Alison Seabeck.]

PETITIONS

HMRC Work Force Change (Lincolnshire)

Mark Simmonds: I wish to present a petition signed by approximately 1,500 people on behalf of the staff and customers of the Revenue and Customs office in Boston, Lincolnshire.
	The petitioners declare that they are concerned about cuts to public services, particularly the proposed closure of the HMRC office in Boston, which could have detrimental impacts not only on the staff of the office but on the many businesses and individuals who use the office, and would result in more traffic on Boston's already congested roads.
	The petitioners therefore request that the House of Commons urge Her Majesty's Treasury to work to ensure that the HMRC office in Boston remains open.
	 Following is the full text of the petition:
	 [The Petition of staff and customers of the Revenue and Customs Office in Boston, Lincolnshire,
	 Declares that they are concerned about cuts to public services, particularly the proposed closure of the HMRC office in Boston.
	 The Petitioners therefore request that the House of Commons urges HM Treasury to reconsider the decision to close the office in Boston, which provides an excellent service to local people.
	 And the Petitioners remain, etc.]
	[P000234]

Planning and Development (Heathrow)

John McDonnell: I wish to present a petition on behalf of the supporters of the campaign to save Cherry Lane cemetery. The background to the petition is that the British Airports Authority has submitted its proposals to extend Heathrow airport, and the road proposals linked to the airport. The roads run through Cherry Lane cemetery, which is the only operational cemetery within my constituency, and is where many of my constituents have buried their loved ones.
	The campaign to save the cemetery has collected 8,000 signatures online and in hard copy. I wish to pay tribute to the campaigners and the campaign team, in particular Natasha La Mothe and her mother and family friends who have collected so many signatures on the petition.
	 Following is the full text of the petition:
	 [The Petition of the Supporters of the Campaign to Save Cherry Lane Cemetery,
	 Declares that the proposal by the British Airports Authority to construct an access road to the proposed Third Runway and Sixth Terminal at Heathrow Airport through Cherry Lane Cemetery, which is the only functioning cemetery in this part of the London Borough of Hillingdon, is an act of outrageous, sacrilegious destruction, which is causing considerable distress to the families of loved ones buried at the cemetery and concern to the local community.
	 The Petitioners therefore request that the House of Commons calls upon the Government to reject this proposal and safeguard this site.
	 And the Petitioners remain, etc.]
	[P000235]

HOME INFORMATION PACKS

Motion made, and Question proposed, That this House do now adjourn. [Alison Seabeck.]

Angela Browning: It is less than a year since the Government made it a statutory requirement for sellers of domestic properties to provide and pay for, at their own expense, home information packs. It is now clear that the Government have introduced HIPs without proper preparation of the process that is to be followed, they are of questionable value to those who buy a home, they are an additional expense to those who are selling a home, particularly in what is frequently referred to as a turbulent housing market, they do not speed up the process of conveyancing, and the energy efficiency component is neither reliable nor worth the money that is spent on it. Despite the fact that HIPs were subject to frequent debate in the House and also subject to many U-turns on the part of the Government in terms of how they would or would not introduce them, none the less the Minister at the time, the right hon. Member for Pontefract and Castleford (Yvette Cooper), now the Chief Secretary to the Treasury, repeatedly espoused them as valuable, often likening the process to buying a fridge or identifying the need to change the light bulbs.
	In less than a year since the full introduction of HIPs, we have seen several reports from independent bodies that have identified the real weakness in the system. I refer first to the Leeds Legal report by professional lawyers in Leeds, which came out only this month. It states:
	Fifty-seven per cent. of people questioned in the national research for Leeds Legal, an alliance of the city's major law firms, said the time has come to ditch the packs, introduced by the Government last August in a bid to simplify and speed-up the home buying process.
	Mr. Stephen Pickard, head of residential property at law firm Lupton Fawcett and a Leeds Legal spokesperson, said:
	Our finding that a clear majority of people now want Hips abolished will come as an eye-opener to many and a blow to the Government.
	It will be no surprise to many professionals, however. Most of the buyers I've acted for since Hips were introduced have regarded the content of the packs as so unreliable they've commissioned providers like me to supply the information independently.
	It sounds as though people are so disenchanted with HIPs that they are paying twice. Mr. Pickard goes on:
	Given the current credit crunch, most buyers are far more concerned about securing funds for their purchases than they are about receiving Hips, which they seem to regard as a complete waste of time and money.
	Furthermore, it is not just the sellers who have to part with moneyand I have had reports of this fact, and personal experience of it. If someone wants to have a look at a HIP for a property, even one for which they have made an offer, they can look at it online. However, if they want to receive a hard copy, costs are involved and there is also a cost to the purchaser. I should like the Minister to look into that issue particularly, because it seems that money is being paid out at both ends.
	The recently produced Carsberg review of residential property was commissioned by the Royal Institution of Chartered Surveyors, the Association of Residential Letting Agents and the National Association of Estate Agents. It is very comprehensive and includes a chapter on HIPs, which states:
	I understand that, to date, few buyers have shown an interest in the HIP.
	So we now know that despite the fact that sellers must by statute pay to have HIPs produced, a lot of buyers do not value them at alldo not even look at them. The review goes on:
	a substantial number of conveyancers ignore its existence and recommission searches on receiving instructions from their buyer client, suggesting a lack of confidence in the limited content. This evidence alone indicates that the costs of HIPs are likely to exceed their benefits. Some would summarise the position by saying that the HIP provides the worst of all worldsit omits much of the most useful information but still imposes significant costs on the property transaction.
	The report recommends
	that the Government should amend legislation on Home Information Packs to make them voluntary.
	It is not only property market professionals who are disenchanted with HIPs; so, too, are those who represent consumers. I recall that when we had the debates on this subject, Which?, an eminent body representing consumers, was initially in favour of HIPs and very supportive of the Government's measures. Since then, however, the magazine  Which?, published by the organisation, has, in April this year, run a report headed Hips need a shake-up. It says:
	The Law Society told us it considered Hips to be 'the worst piece of consumer legislation in 50 years'.
	That is quite an indictment of how the Government have forced this ill-thought-through legislation on to the statute book.
	 Which? quotes some of its membersthe consumers themselves, who are paying out their money for HIPs. One member in Llandudno
	wasn't impressed by her inspector's quote.
	The inspector figured that the total annual energy cost for her home would be 606, but she had just received an energy bill that showed she had used only 518 in the past year. She contacted the inspector and the agent, but they were not interested.
	I have brought this debate to the Floor of the House tonight not only because, as we Conservatives said when HIPs were debated, the Government have not thought the issue through, but also because of information and representations from my constituency. My casework shows the flawed system and the anger that people start to feel when they pay out good money to so-called professionals who clearly are not professionals and are not properly trained, because they have to go through a process that the Government have not thought through.
	A constituent, who will remain anonymousshe is a lady who lives in Awliscombewrote to me to say:
	the energy efficiency rating and the CO2 rating I felt were only 'average' when I eventually saw the graphs. I asked to see the report (why is the vendor not given a copy?), and was horrified by what I read. My house has three solar collector panels on the roof, yet the report suggested that solar heating be installed!
	How can anybody have any confidence in somebody assessing a property for its energy efficiency if they fail to notice the solar panels put on the roof, at great expense to the householder, let alone add that to their assessment? Furthermore, they assumed that there was a solid floor when in fact there was not.
	I have raised this issue on the Floor of the House before. On 18 December, during the Christmas Adjournment debate, I described the case of Mr. Dyke of Dunkeswell, about which I have had correspondence with the Minister. The problem that Mr. Dyke identifiedI have visited his home, so I am very familiar with itis typical of what must apply not only in my Devon constituency but around the country. When the Government introduced the process for assessing properties, particularly the energy performance certificate, they used a form of matrix that clearly was trialled only on modern properties. The tick-box procedures that the assessors go through mean that they have great difficulty in accurately identifying the merits of the energy efficiency of older houses, of which we have a great many in Devon. Very old houses are added to over the years and the centuries, and improvements are made to them. If people are to be expected to pay out of their own money for such a certificate, they will expect, whatever the construction or age of the property, that the people coming to carry out the process are able to do it competently and professionally. When I tabled parliamentary questions to the Minister's predecessor, I received some disturbing answers.
	One of my concerns as regards older buildings is the way in which cob walls are assessed. We have a lot of those in Devonthey are very thick walls that have good insulating properties. Another material that has been used to construct many Devon properties is wattle and daubalthough it is not used nowadays. This flags up the fact that the major building regulations were last changed in the 1960s, when there was a big push to reform them. However, the thinking behind the Government's home information packs seems to be that properties built since 1960 are typical of all properties that are assessed. There are a lot of anomalies. For example, people with solid-fuel Agas or wood burners, which are deemed to be carbon-neutral, are not even given a credit rating on their energy assessment for those types of heaters and cookers. For some of the older properties, there is no proper consideration of the amount of double glazing, which I would have thought pretty fundamental when assessing their energy efficiency.
	The SAPstandard assessment procedureis the Government's approved procedure for calculating an energy rating. It is based only on modern houses. The process for a reduced data SAP, which many of my constituents in older properties have come across, is so flawed that they, like Mr. Dyke, have had to take professional advice. He said that he had a professional benchmark, because in 1998 a properly approved, qualified architect had rated his property with a SAP of 60. When he had the HIP done to sell the property, the SAP was reduced to 44. He therefore started to ask a lot of questions and to negotiate with the powers that be, especially the national home energy rating people, because he wanted to identify the problem and discover why the SAP was lower now, albeit with reduced data, than it was when an architect examined the property.
	There is a long list of items that the reduced SAPs cannot take into account because of the procedure that the Government have introduced and which the assessors have to implement. I will not go through the whole list tonight because I mentioned many itemsthey are on the record in  Hansardwhen I raised Mr. Dyke's case in December.
	Mr. Dyke wrote:
	Whilst awaiting the response from Ms Cooper I was not idle and entered into negotiation with NHER who were forced to accept that the reduced data SAP methodology could not work on renovated or even modified buildings. They tasked their software people to declare some of the facts who came back to me with the enclosed technical document that formally acknowledged the following:
	Wall insulation is not accurately reflected.
	Roof insulation assumed in respect of the age of the building...
	RDSAP cannot reflect retro fitted, under-floor insulation.
	The long list goes on and on. It tells even a lay person that people are being unfairly treated. They pay good money up front, but there is a negative impact on their energy performance certificate. They have to pay a lot of money for something that is not accurate. The Government must do something.
	Mr. Dyke is a persistent man, and I am grateful to him because he has taught me a lot about HIPs and energy performance certificates. He managed to negotiate with the national home energy rating scheme an agreement that he could write, with its approval, on his official energy performance certificate and on the estate agent's documentation:
	Since the introduction of the HIP legislation, the assessment procedure used for producing the energy performance certificate (EPC) has been monitored. The EPC is a comparison tool and there are limitations in the model that may lead to a property like this
	meaning like Mr. Dyke's house
	being rated lower than is actually the case. Further information can be obtained from the Agents and detailed literature is included within the Home Information Pack appertaining to this property.
	In other words, through his persistence, Mr. Dyke managed to get NHER to admit in writing that there is a defect in the process.
	The point that I want to make strongly to the Under-Secretary is that what applies to Mr. Dyke's property surely must apply to thousands of other older homes throughout the country. The lady with the solar panels that were not noticed asked whether I could bring the matter to the attention of the relevant authorities, because trading standards should have an interest in it. That is a pertinent point. If the Government are forcing people to pay money not only for a flawed process but for the unsatisfactory standards applied by those who undertake it, and those people consequently suffer material loss, I hope that every trading standards department in the country will take an interest.
	The Under-Secretary may wish to consult NHER on this matter, because if it has put such a statement in writing for one property, that must apply to others. I would like a written response from the Under-Secretary about how he evaluates that damning report that my constituent managed to get.
	I tabled written questions on this subject, and I was horrified by, for example, the fact thatunless the Under-Secretary tells me differentlythe Government have no plan for people who have paid for the energy performance certificate to receive a copy, so that they can identify the problems early. Why can they not be given a copy if they have paid for one?
	I have other questions, which I shall not go into because of the lack of time, but I am sure that the Minister's Department has done its homework and identified the fact that I tabled some written questions earlier in the year. The Department seems to have put the scheme in place long before it had worked through the models that would work, and before it had a system in place that would work for all properties. That is a shambles. Those reportsindependent reports, from professionals and consumersdeserve the Department's attention. I hope that the Minister will tell me that the Government were hasty and ill-prepared, that they got this wrong, and that they are now going to do something about it.

Iain Wright: I congratulate the hon. Member for Tiverton and Honiton (Angela Browning) on securing this debate. I know that she takes a close interest in home information packs and energy performance certificates. She has mentioned her contributions to debates in the House on the subject, and I have seen recent written parliamentary questions to my right hon. Friend the Minister for Housing that demonstrate her commitment to her constituency.
	I am grateful to the hon. Lady for giving me the opportunity to deal with her concerns tonight. I understand from her contribution that she is concerned with three broad aspects of HIPs and EPCs: the value of HIPs and the policy framework; buyers not being interested in HIPs; andthe key part of her contributionpoor quality HIPs, HIP providers and EPCs. Let me take each of those in turn.
	On the value of HIPs, I am not convincedin fact, quite the reversethat the current house buying and selling process has so far provided clear, transparent information for people who are undertaking probably their biggest financial transaction. It is not right, for example, that people in this country have to wait the longest time in Europe to buy or sell a house. The introduction of HIPs has helped to start to address those problems.
	Hon. Members in all parts of the House recognise that the EPC can play a vital role in helping us to achieve our carbon emissions objectives, as well as helping consumers to save money on their fuel bills, which is something to which I shall return later in my contribution. It is vital that the EPC provides information of genuine value and is appropriate to the property being reported on. It is equally important that the people who produce the report are competent. Again, I shall come to that in a moment.
	I am sure that the hon. Lady will agree, however, that we are seeing value in HIPs. On average, there have been savings of around 30 on property search costs, which in some areas have fallen by 120 since the introduction of HIPs. Important information on energy efficiency is now being delivered to consumers as part of HIPs.
	More than 750,000 HIPs have now been produced, with EPCs providing information to sellers and prospective buyers alike on measures to improve the energy efficiency of their homes. According to the Energy Saving Trust, consumers can save on average 300 a year on their fuel bills if owners follow the improvements recommended by the EPC. Throughout the country, that could produce 100 million of savings on energy bills.

Angela Browning: But surely the report by the consortium of Leeds lawyers shows that the issue is not about reducing conveyancing costs, but about whether people feel that the HIP is a reliable substitute for the normal paperwork that would be involved in conveyancing a property. The fact of the matter is that it is not. If we are talking about a modern property that is still under an NHER 10-year guarantee, one can understand people not bothering too much about the HIP, which means that such transactions are therefore pretty straightforward. However, for all those pre-1960 properties, some of which will be hundreds of years old, the conveyancing is quite complex. If the lawyers are telling the Minister that people are not relying on HIPs, he should really take notice of that.

Iain Wright: I will come on to that point, but let me turn to the second point that the hon. Lady made, which she touched on in her intervention, too, about buyers simply not being interested in HIPs. I disagree with her quite fundamentally about that. When consumers see HIPs, they see their benefits and they see real cost savings that help to improve the decision-making process for them. However, I think that there is a problem at the moment with estate agents not showing HIPs. We need to do more to encourage estate agents and others to show HIPs to home buyers and sellers, as well as encouraging consumers to ask for them when they are interested in a particular property. All the indications are that HIPs improve the home buying and selling process. Having said that, I take the hon. Lady's point that home buyers are not being shown the HIP at present.
	My officials are currently drafting correspondence to estate agent bodies, saying they should be more proactive in making buyers aware of the HIP and the EPC as early as possible. The correspondence will remind them of their statutory duties with regard to the timely provision of an HIP and an EPC. It will also point out that agents who fail to make an EPC available risk making the owner of the property liable to pay a financial penalty imposed by the local trading standards officer.

Angela Browning: rose

Iain Wright: I will give way again, but I am keen to get to the meat of my contribution.

Angela Browning: I would like the Minister to comment on the fact that some people are having to pay to receive a copy of the HIP when they want to buy a property.

Iain Wright: I will certainly look into the point that the hon. Lady raises. We are keen to make it as quick as possible for home buyers and sellers to access the relevant information, and one of the ways of doing that is through online and e-conveyancing. I suggest that, if an estate agent is charging a fee for a hard copy, there is nothing to stop buyers printing a copy at home, if they so choose and if that option is available to them. The whole point is to try to rationalise the costs as much as possible.
	I want to move on to the central point of the hon. Lady's contribution, namely, the poor quality of HIPs and HIP providers. Given the policy objectives for HIPsa greater degree of transparency in the home buying and selling process, more appropriate and up-front information, and higher levels of confidenceit is important for consumers to have clear routes to complain and obtain redress when standards have not been as high as they should have been.
	Most HIP providers subscribe to the HIP code. The HIP code provides protection for home buyers, sellers, estate agents, conveyancers and mortgage lenders who rely on the information included in a HIP provided on residential property in England and Wales. It sets out minimum standards which HIP providers have to meet. As part of the code, there is a formal written complaints procedure for handling complaints in a fair and prompt manner. The complaints procedure promises that complaints will be acknowledged within five working days of receipt, and normally dealt with fully within four weeks. If the consumer remains unsatisfied, they have the right to refer the complaint to the independent property codes adjudication scheme. The HIP code states that all providers who subscribe will fully co-operate fully with the independent adjudicator and comply with any decision reached.
	In addition, all HIPs and their providers who comply with the code will display the HIP code logo prominently on their literature and on the HIP itself. It is also possible for consumers to check whether a specific HIP provider subscribes to the code by contacting the Property Codes Compliance Board. In this way, reassurance should be provided to home buyers and sellers regarding the quality of the product that they are using and the professionalism of the firm that is providing it.
	Let me move on to the key point. Now that HIPs and EPCs have been up and running for 12 months, we can look at certain difficulties that we have encountered, particularly in relation to non-standard buildings. As the hon. Lady suggested, buildings in this country span a period from the middle ages to the modern day. Given the wide range of ages, spanning perhaps 700 years, it is perhaps understandable that we have had some degree of difficulty in regard to the operation of EPCs and HIPs.
	The software used to produce the EPC is called the reduced data standard assessment procedureRDSAPand it takes account of a wide range of features in a property, including its age and dimensions, the material used to construct it and whether there is cavity wall insulation, double glazing and so on. To keep the costs reasonable, the software has been developed to be simple enough to achieve consistency and to avoid requiring energy assessors to spend an unnecessarily long time on site. Since August 2007, something like 860,000 EPCs have been produced using this software, and the accuracy of the vast majority of these has achieved the agreed professional level.
	I am sure the hon. Lady would acknowledge that a balance must be struck between the time spent assessing a building, the associated costs of producing the HIP and the EPC, and ensuring that all appropriate features should be taken into account. As she mentioned, at present the software cannot take into account every possible feature in the insulation, the heating system controls and so on that a homeowner may have provided, and to input that at the start would have caused immense costs, making HIPs and EPCs uneconomic and counter-productive.
	It is also important to point out that an EPC is designed to be a description of the energy performance of the building rather than a description of the building per se. Nevertheless, we recognise that in a small number of cases, the RDSAP may not reflect the full complexity of a property. We will therefore update the software in September to allow additional data input where it is considered appropriate by the energy assessor.
	The hon. Lady will recall that on 14 January, when my right hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) was the Minister for Housing and Planning, she wrote to her and addressed Mr. Dyke's specific point about cob construction. In that letter, she said:
	This issue has been recognised by my Department, and the software will be amended to include cob construction, although using the sandstone descriptor is not likely to impact the rating significantly.
	I hope that that reassures the hon. Lady. In addition, if an owner wants unusual features to be taken into account, a full SAP calculation can be undertaken, but I am sure that the hon. Lady would recognise that that would need much more time and a more highly qualified assessor, so it would be likely to come in at greater cost.
	In conclusion, I hope that I have reassured the hon. Lady in respect of the three points she made. She mentioned that she is unhappy with the performance of HIPs and EPCs. In the light of current economic difficulties and particularly the drying up of mortgage finance, I would suggest that the last thing required in the housing market is needless tinkering. In the current climate, the industry and consumers want as much certainty of information as possible. As regards escalating fuel bills, for example, which were caused by a trebling of oil prices on the world markets, the importance of information about energy performance has never been so timely. In such a turbulent time as we are experiencing, I believe that HIPs and EPCs are an important and stable part of rationalising the home buying and selling process.
	 Question put and agreed to.
	 Adjourned accordingly at seven minutes past Eight o'clock.